The Flow of Consciousness

Update 2010-06-03: This was letter was published in the Tribune-Review on Wednesday, June 2, 2010.

Sent via email 14 May 2010 to USAToday, Pittsburgh Post-Gazette, Pittsburgh Tribune-Review, Beaver County Times, New Castle News, and the Sharon Herald

Recently, nationally funded ads have mislead Pennsylvanians about the FairTax. These ads claim that the FairTax will add 23% to the cost of everything. This is true, but the ads omit the most important part of the tax reform plan.

What these ads irresponsibly fail to address is that the FairTax would fully rid citizens and businesses of income taxes, federal payroll taxes, inheritance and estate taxes, capital gains tax, social security and pension taxes, and the “marriage penality”. Additionally, it fails to mention a key provision: the prebate, a pre-refund of all taxes paid up to the poverty level, which amounts to $500 per month to a family of four.

Personally, I’d pay about 5% less tax with FairTax.

FactCheck, a nonprofit and non-partisan information verification agency set up by UPenn, agrees, calling these ads “false and misleading“.

While I appreciate the attention to the FairTax, it’s important that people know the facts and realize that they’d have more money to spend because they wouldn’t have any income tax taken out of their paychecks, plus the prebate gives another $500 per month, enough for food, or perhaps a car payment, or an iPad, whichever they deem fiscally responsible for their own needs.

It’s all over the stock world today that top executives, accountants, and others related to Spongetech Delivery Systems (SPNG) were arrested by the SEC, charged with securities fraud.

The top executives of Spongetech Delivery Systems Inc. (SPNG) were arrested and charged Wednesday in an alleged scheme to defraud investors by reporting falsely and grossly overstated sales figures.

According to a criminal complaint filed Wednesday, Michael Metter, Spongetech’s chief executive and president, and Steven Moskowitz, the New York pre-soaped sponge maker’s chief operating officer and chief financial officer, were charged with conspiracy to commit securities fraud and obstruction of justice. They each face up to five years in prison on the conspiracy charge.

The article, and others, go on to reveal that SPNG overstated its sales by up to 99%, the percentage of which its sales were to entities which don’t even exist.

SPNG down 83% on news its execs were arrested for securities fraud

SPNG ended the trading day today at .0069, an 83% drop.

I rode SPNG through the pump-and-dump scheme last June (SPNG dropped 27.66% yesterday, or how I learned many lessons about the stock market, Out of SPNG, 7% profit, back in and holding).

I bought back in shortly after and have been holding since. I added a small position in November, bringing my average from .15 to .095. I bought a tiny position today for $75, bringing my average to .08. I somewhat regret this decision, as I probably could have bought and sold more intraday if I had more cash in my account.

Timothy Sykes has a fantastic article on the mess: The Biggest Penny Stock Pump & Dump Ever? Possibly $250+ Million, SEC Alleges SpongeTech Scheme Sold 2.5 Billion Shares, Suckering Sports Fans Everywhere, What Do You Think?

If what the SEC alleges is proven true and SPNG executives did sell 2.5 billion shares, this may go down as the largest penny stock pump and dump in history (the stock rose from under a penny/share to 30 cents/share so you gotta figure an average selling price of 10-20 cents/share would yield $250-$500 million in allegedly illegal profits)…pretty amazing considering SPNG is getting sued by half a dozen sports teams like The NY Mets, NY Islanders, Chicago Bears & NY Giants as The NY Post recently pointed out (nope, they didn’t ask me for my opinion, I am simply linking to a published article FYI) for mere six figures (where did all the money go from these 2.5 billion share sales?)

I, to this day, which that I had listened to @_TheDean when he warned me the morning of June 12 that he thought SPNG was a pump and dump and that I should take my profits (~99%) and run. Considering my goal of stock trading is to risk a little bit of extra, unplanned income to help pay off my student loans, I’d have been more than 2/3 of the way there had I followed his advice (and perhaps that of Sykes).

Live and learn. Risk is risk.

Anyway, worst case scenario is that I lose the couple thousand dollars I have in SPNG and get to perhaps partake in a shareholder lawsuit. Best case scenario? Current execs serve their time and someone else comes in, and takes this .0069 dollar stock to a 1.00 dollar stock in a few years. No matter what, I’m in for the ride. Profits or bust on this one.

Ironically, I just watched Wall Street last night.

I didn’t blog as much as I would have liked to this year, mostly because of my crazy busyness.

My article on how to install Gears on 64-bit Linux continues to see quite a bit of traffic. I even host a copy of Gears, even though it’s likely out of date. Also in the Linux vein, my articles on how to buy DRM-free music online with Amazon MP3 on Linux and Android were moderately popular. I wrote an article on how to add CACert root certificates to Chromium on Linux and it sees more traffic than most of my other posts combined.

I wasn’t as active in the open source community as I would have liked, but I did make some contributions to Gwibber, Astrid, Celtx, and Lernid. I mentioned the first three in my Launchpad activity update. The latter is a newer development by Jono Bacon. I contributed the entire Esperanto translation less than two days after it was available on Launchpad. I have no way of verifying it, but I think that the Esperanto translation was the first complete non-English variant translation available.

I recently wrote two brief articles on how to automate some tasks on Facebook. One was how to rapidly expunge friend suggestions, and the other was how to select all friends in a friend select dialog.

I met Tom Dickson of Will It Blend? fame at CES last year. He was really cool and friendly.

I also wrote a few articles on politics, my favorite being A Comment on Socialism Defined, a comment left on a friend’s blog, Strike the Root!. I’ll not go into how much I think Obama and his friends have screwed up the country already (it’s not all been bad—he has done some good things). That’s something for another article.

A new hobby this year for me has been stock trading. I’d saved up some money and decided to use some skills I learned in middle school to make a buck or two on the stock market. Ironically, not 12 hours after I blogged about my flagship stock being up near 200%, that stock, SPNG, dropped 27.66% in one day, costing me $23,000 of value on a $10,000 investment in 65 minutes. It recovered, and I still made out with a profit, but I learned a very, very valuable set of lessons. I still kick myself occasionally because of this and probably will for a long time. My goal of getting into stocks was to generate enough money that I could pay off my student loans really quickly. I could have paid off more than 2/3 and I didn’t cash out when I should have.

I did meet many, many new people in the stock world, especially Stockguy22 and the Bulls on Wall Street crew. I said goodbye to StockTwits after I was temporarily banned for cheering on Vonage (VG) when it was less than 50 cents, riding it to 80 cents, and cashing out. They called it a worthless, crappy penny stock. A few weeks later, it spiked to ~2.20 and has been above a dollar since. HA!

I got some neat advice from friends while considering the purchase of a MacBook Pro (which I got and love) and the acquisition of a PS3 (which I did get).

The biggest changes in my life were in my location and work. I got a new job in March at Vivísimo, a search platform maker in Pittsburgh–I even wrote a post on the corporate blog! I moved in with some friends in May, but realizing we were a little cramped, I moved into a new apartment in July (I didn’t write about that!).

I wrote more than 28 articles for Bob Buskirk‘s ThinkComputers. My favorites were the Masscool MP-1371RS Media Player and QNAP TS-809 Pro network attached storage device. I use the former alongside my PS3 for video formats my PS3 can’t stream from the latter. The NAS has become the central storage hub for all of my computers, replacing the QNAP TS-109 Pro I reviewed two years ago.

BIOS LEVEL was fairly inactive this year, largely because of a major server outage from May to August. I did write an article on the Orbita Mouse, which I still use to this day at work. I did record and post several videos from Ohio Linuxfest 2009, including Linux Journal editor Shawn Powers’s keynote, Jorge Castro‘s talk on building a community around an open source project, and more on licensing, making money from open source, democratized design, and talking to policymakers and legislators about open source. All Ohio Linuxfest videos with a write-up are available on BIOS LEVEL, or on BIOS LEVEL’s Blip.tv channel.

Jon Daniel and I spend most of November cranking out a beta version of Profyle.at, a personal profile directory service. We’re not entirely finished yet, but sign up for our Profyle.at beta and you’ll likely get in! We want to help people find you on the Internet so your friends and family can follow you on whatever sites and networks you like the most. We pitched for funding and didn’t get it, but were cordially invited to present again during the next round in a month.

Brigette and I are still together, and going strong. We’ve spent most of her winter break together, driving throughout western PA to be with friends and family, too. She’s been working on her web site for her beagle and vizsla show dogs, Glade Mill Sporting & Hound. She’s come a long way, from using a completely WYSIWYG editor to redoing it with a mix of code and WYSIWYG with Adobe Dreamweaver. I’m eager to see what she’s planning for it.

I originally posted this as a comment on Strike the Root!, but thought it relevant enough to be posted here as a full entry unto itself. It might be easier to understand it if you read it in context in the entry “Socialism Defined”. This comment in response to another comment which is very much anti-capitalism.

However, it’s important to consider the value of the land owner to the worker. If the worker were solely responsible for taking care of the land, machinery, and other tools of the trade, then that worker would be far less productive.

Let’s muse upon this. In the ideal situation, the worker creates something of value to others. He continues doing so, using his own equipment, land, and resources. He receives in its entirety all earnings from his labor, and uses those earnings to invest in more land, equipment, and resources. His investment provides income to no one, because he is doing everything himself. He is a producer, not a consumer.

He realizes that if he pays another person to gather resources, to construct equipment, to prepare land, he can spend more time producing the actual product himself. So, he sacrifices a portion of his earnings in exchange for a needed product or service.

He continues to realize the value of relying on others to do the tasks he’d rather not do (vendors) so that he can spend more time doing what he does want to do.

Eventually, he arrives at the point where the only things he does for his enterprise are coordinate these vendors and produce his product. He’s able to find a balance between the earnings he keeps for himself (profits) and the earnings he sacrifices (expenses) so that he can spend the optimal amount of time producing a product.

As in any industry, he’s bound to encounter both competitors and aspiring competitors. He proposes this to them: “I’ll reduce your expenses by permitting you to use my resources. You get more profit because you can spend more time producing and less time coordinating vendors. All I ask in return is a small portion of your profits, as I act as a vendor because I coordinate vendors, and I do the things you’d rather not do, such as care for the equipment, facilities, and land, and I actually sell the product.”

Our man has his first employee, and has become management. In another way, the employee is also the employer, because, in a way, the employee pays the employer to provide the equipment, land, and resources so that the employee can produce the product.

This carries on ad infinitum until our man has become The Man, because he spends more time coordinating vendors and managing employees than actually producing a product. Should not he be compensated for his work coordinating these vendors and selling the product?

The key here is that all of this interaction is willing. If at any point any person is wholly unwilling, it becomes slavery.

Government works similarly. Citizens, or, really, signatories of some agreement forming a government, federation, coalition, or other such body of people, sacrifice a portion of their earnings so that they can pay a vendor to do the things they don’t want to do. These things include caring for the land of the government, and the equipment and resources required to do so. Laws became necessary to protect the rights of citizens from abrogation by other citizens (and, arguably, the choice deities for the realm) and to ensure that the commons of the government fall not into tragedy (see Tragedy of the Commons).

The people who provide these services are vendors to the government. We call them firefighters and law enforcement (police, code enforcers, etc.).

The factor differentiating our man’s enterprise from our model government is that government need not generate a profit. It is merely a cost center financed by those who willingly and gladly pay to have others take care of the things they’d rather not do. In this way, the government is the employee of the citizens, and the government may employ citizens who are vendors.

There’s another observation to be made here: the government is only paying its vendors/employees in return for a service. Also, the citizens are willingly sacrificing a portion of their earnings in order to finance their government, which employs willing vendors, who provide a product (or a service) to the government.

The government can only spend as much of these earnings as it has, but it can request that citizens contribute more. Citizens who are willing contribute more, those who are not willing voice their opinion. Both sides look to the original agreement and successive laws for direction and decide who gets their way: the government or the citizens. If the government gets its way, citizens must contribute more or cease participation in the government.

You can see the problem here. Our laws have been written so that it’s impossible to leave the government because of a disagreement. Instead, we subject ourselves to this oppression, contribute more of our earnings, and hope that we can alter the government so as to reduce the contributions, by an outright reduction or a reduction in the use of vendors employed by the government, thus a reduction in the services which the government provides to the citizens.

The “exploitation of the worker” occurs when The Man takes more than his share and does not provide sufficient value to the employee, and the employee is unwilling or unable to right the situation, or feels that there is nothing wrong with the arrangement when outside observers disagree. It’s a tragedy of capitalism caused by greed, a human factor which can only be controlled through education of moral values (religious and non-religious, although the former seems to be easier to use) and self-determination.

The “exploitation of the citizen”, their sentiment that taxes are thievery, occurs similarly to exploitation of the worker: the citizen is unwilling or unable to right the situation, or feels that there is nothing wrong with government when outside observers disagree.

Fortunately, the government of the United States is set up in a way in which the citizens employ a vendor who represents their interests in the government–a representative and/or senator. Like our man’s enterprise, if the citizens do not like the product of that vendor (here, laws which care for the lands, equipment, and resources of the government, and protect the rights of the citizens), they can choose a different vendor.

Unfortunately, altruism plays a larger factor in government than in our man’s enterprise. If the man realizes that a portion of his business is failing, he can choose to stop producing the product (see the argument of the square wheel versus the round wheel). The government does not have a product, and thus has nothing which it can or needs to stop producing.

However, if the citizens decide that they want to provide vendors with earnings without that vendor having provided any service or product to the government, and direct the government to ask citizens to contribute more of their earnings in order to compensate these vendors who have provided no value through a product or service, these citizens and their government are edging toward socialism.

The justification is that these vendors, who are likely citizens with who are unable or unwilling to provide a service or produce a product, are of value to the citizens or government on some inexplicable, immeasurable level: altruism.

This is all well and good, until a citizen decides that a vendor is not of value and should not receive earnings, as the vendor has provided no value to the citizen, even by proxy of the government.

Our modern government has grown to a size where “exploitation of the citizen” is commonplace because of the peoples’ unwillingness, inability to let their voice be heard; to choose a new vendor who represents their interests and philosophies. They’ve lost hope. Because of this, they call their government thieves, because the government takes valuables from unwilling contributors and redistributes those valuables to those who are unable or unwilling to provide some value in measurable terms.

For some time, I’ve been considering buying a new laptop computer. I’ve been primarily considering a 13″ MacBook Pro with a 2.53 GHz Core 2 Duo processor, 4 GB of RAM, a 250 GB hard drive, and all of the fixins that come with it. I’d be adding only the Apple Remote and possibly the AppleCare extended warranty.

Why a Mac? Primarily, freedom of choice. If I buy a standard Windows, Linux, or OS-less computer, it’s unlikely that it will run Mac OS X as a Hackintosh. Mac laptops will run Mac OS X, Windows, and (Ubuntu) Linux. Running all three OSes gives me the widest choice of what tool I want to use for a particular task. I imagine that I’ll be using Mac OS X most of the time, switching to Windows for gaming on the go, and using Ubuntu in a VirtualBox, VMWare, or Parallels virtual machine when I need my Linux fix. I’m a software developer, so having access to the emerging mobile market (iPhone development with Xcode, Android development with Eclipse) as well as the established markets (system and web development) is important.

I’m a desktop Ubuntu user and prefer it for my day-to-day usage. I’m open to the idea of seeing what Mac OS X has to offer, but I’ll still have my desktop around for normal usage. I’ve been without a regular laptop for nearly 8 months (been using my XO every now and then), and I hadn’t really missed it until I started working at Vivísimo. It could be peer pressure (I’d estimate that half of the company uses Macs for development, system and web), or it could be seeing a lot of people very happy with their choice.

There’s also a bit of nostalgia in going back to Mac. I used Mac OS from 7.0 until 9.0, then briefly used OS X 10.1 at the end of high school, followed by some OS X 10.5 on a 13″ MacBook earlier this year.

Also, I compared the hardware, and for similar specs, the MacBook is only $100-$200 more compared to most offerings from MSI, ASUS, Dell, Lenovo, and HP at NewEgg, Amazon, and the like. This is a sizeable but understandable difference for the quality of hardware and, most of all, quality of customer support.

The biggest problem for me is simply figuring out where to buy it. I’m cautiously arranging for this purchase in my finances, and I think I’ll be ready before the end of September. I made this chart to show potential places I could purchase it.

The cheapest option seems to be Apple refurbished plus the $124 AppleCare plan from eBay. I’m also considering the MacMall sans AppleCare, as it includes Parallels for free after rebate. Currently, I see it like this: Apple (refurb) > MacMall > Apple (edu) > Amazon > Apple (new) > Buy.com. I have no qualms about refurbished things–they’re good as new most of the time, and I’ll have a hard shell on this within a month of purchasing it.

I’m wary of AppleCare, though, but I see its usefulness. I got a five year warranty on my Dell monitor in 2006 and I’ve used it three times already. I plan to replace the 250 GB hard drive which comes with the MBP 13″ with a 128 GB SSD I can get on the super cheap. I don’t really have a need for a ton of hard drive space, even with three OSes installed. I can stream my music, and my pictures will remain on my desktop. I have a VPN into my FiOS-connected apartment, so remotely accessing things on my NAS or desktop wouldn’t be an issue. I’d see faster boots and faster loads, plus some battery life savings.

The downside–the primary reason I mention this–is that, if I mess up when installing the SSD (unlikely), I void the warranty. An ill-informed Apple Genius tried to convince me that simply opening the back voids the warranty, but he is sorely mistaken. Replacing the insides of a MacBook Pro does not void the warranty based on the simple action of replacing them. One must really screw up something and Apple must prove that the replacement screwed up other things (hard to prove!).

I’ll likely up the memory when DDR3 prices come down, too.

So, Internet friends, readers, countrymen, I ask you this: talk me out of this, or talk me into it. I need a decently powered, long life battery-ed, light gaming capable, webcam having, OSX/Windows/Ubuntu capable laptop for cheaper than the above. Bonus points for benefits and drawbacks of AppleCare, as most folks to whom I’ve spoken haven’t gotten it based on cost alone.

Keep the fanboyism to a minimum, please, and do be constructively critical.

I’ve done a ton of programming this week outside of work. I feel like I’ve had at least five browser tabs open for Launchpad at all times! If you’re not familiar with the site, it’s a code hosting service for open source projects, most notably Ubuntu Linux.

I’ve done some Esperanto translations on Launchpad prior to this week. I translated a large portion of Akregator (RSS/Atom feed aggregation for KDE) and a few others. I’ve also filed and added to a bunch of bugs, many of which were cleaned up by the recent One Hundred Paper Cuts bugfixing effort by the Ubuntu development team.

This week, I was abnormally active. I had some downtime here and there at work, plus some open nights, so I took advantage of this time to make significant contributions to three projects: Gwibber, Astrid, and Celtx.

Gwibber

Gwibber is a microblogging client for microblogging services such as Twitter, Identi.ca, and Jaiku. It also supports Flickr, BrightKite, FriendFeed, Facebook, and more, including generic RSS and Atom feeds. It’s written in Python by Ryan Paul (@segphault) of Ars Technica fame.

I had two and a half contributions this week. One is a patch addressing bug #364303, to add linkification of stock ticker symbols, denoted by a dollar sign followed by the ticker symbol, e.g. $GOOG. Clicking on a linked symbol will launch the browser and point it to Google Finance. Originally, it linked to StockTwits, but that site refuses to support OTC stocks.

The second contribution is a complete Esperanto translation of the program. I have mixed feelings on translating programs since most Esperantists would be using their computer in their native language. I decided to do it because, well, Gwibber has just a few more than 115 strings, so why not? It took me approximately an hour and a half, and it was well spent.

That half contribution is a committed, but as-of-yet unproposed/merged patch to fix bug #364322, wherein Gwibber doesn’t load Identi.ca/Laconi.ca groups at all. The problem is that the constructors for identica.SearchResult and laconica.SearchResult expect a TwitterAPI-compatible dictionary, but are passed a standard RSS feed dictionary instead. identica.Client.get_group() hits an RSS feed instead of an API function, because the Groups API in Laconica is not yet finalized. This causes Gwibber to throw an Exception–it’s caught and displayed, but the results aren’t loaded. I modified identica.Client.group(), which calls get_group(), to instead call identica.Client.get_search() and load the search results for the group name. It’s not a clean result set, though, because Laconia while searching strips the “!” used to denote the group name.

Hopefully the API will make it into Laconica 0.8.1 (the next release, mid-to-late September if they release on their typical schedule), I’ll modify the functionality to use the API instead and it’ll be much cleaner and yield more accurate results.

Astrid

Astrid is a TODO list manager for Google Android. It synchronizes with the excellent Remember The Milk TODO list service and provides task reminders and such. I use it on my T-Mobile G1 and would certainly miss it if it were suddenly gone.

My contribution to Astrid was another (nearly) complete Esperanto translation. I left about 10% untranslated because, well, I needed to go to bed! Unfortunately, I realized approximately 3/4 through my translation that Astrid is unlikely ever to be on a platform which supports Esperanto. The chances of there ever being an Esperanto translation of Android are atomically small.

However, my work was not wasted. Launchpad’s Rosetta translation system permits projects to share their translation with other Launchpad projects, using a essentially a central database of translations. This enables projects to speed up internationalization by using existing translations which exactly match internationalize-able strings. While it’s unlikely that anyone will ever use Astrid in Esperanto, it is likely that another TODO list project hosted on Launchpad could benefit from my work in the future.

Celtx

Celtx is an integrated media pre-production and screenwriting utility. I’ve used it for writing short plays for classes and such. I’m using it now for a forthcoming project which I’ll eventually let out of the bag.

My contribution for Celtx, as the link above shows, has not been code or a translation, but a package for Ubuntu. This was the first time I’d ever build a Debian package (Debian packages are what Ubuntu, a Debian Linux derivative, uses to distribute programs).

A long-existing bug, #99965, requested that someone package Celtx from the source on its main web site. I took interest in it in November 2007, but my initial attempts to package it for Hardy (Ubuntu 8.04, released April 2008) were unsuccessful due to my inexperience with build systems and a lack of time/concentration. I revisited the task for Intrepid (Ubuntu 8.10, October 2008) and Jaunty (9.04, April 2009), but was too busy with my new job and other life happenings.

I painstakingly built Celtx from source manually several times before building a binary package myself without any help from the Debian packaging system’s helper scripts (debhelper, dh_make). It’s a pain in the ass because Celtx is based on Mozilla, the build process of which is not as straightforward as a ./configure && make && make install. However, once I had a working knowledge of the build process, I delved into debhelper and its kin and built a source package. I did it for Jaunty first, as that’s what version I’m running right now, but then I made some modifications here and there to convince Celtx to build on Karmic (9.10, due October 2009).

I’ve learned a ton about deb packages and about make, and I think I can consider myself a “packager” now, having done so.

I’m hoping that Celtx Studios, the company that produces Celtx, releases the source for version 2.0.2 soon. The 2.0.1 source is available, but out-of-date. I’d like to get 2.0.2 into Karmic, but it’s looking like 2.0.1 will have to do for now.

So, if you have an interest in media production and/or screenwriting, or wish to help test a new package for inclusion in the next version of Ubuntu, please, by all means, install my Celtx PPA for Ubuntu Jaunty or Karmic and test the crap out of the package. There are a few known issues on Karmic, but I’m not a C++ coder, so I don’t know what I’d even try to fix.

Moving Forward

I look forward to participating more in the development of Gwibber. Because of my fiddlings with it, I’ve come to know the DVCS tool Bazaar (bzr) pretty well, as Launchpad and it are heavily integrated (hint: Canonical, developer of Ubuntu, also developed Launchpad and Bazaar!).

I know that I’ll keep translating. I’ve noticed that my vocabulary has grown a bit and I’m not using the vortaro (dictionary) as much. I still reference Traduku.net, Lernu!, and Komputeko frequently to get technology terminology and infrequently-seen words.

This morning, my former flagship stock Spongetech Delivery Systems (SPNG) continued to fall after a brief higher start. I wrote Saturday about the massive hysteria and price massacre SPNG holders faced on Friday when a pump-and-dump dumped.

My holdings averaged around $0.112. I decided at open to put a stop limit at 0.15/0.14, but when the price hit the stop, it didn’t execute. Granted, I was selling 112,160 shares, so I figured that no one was looking to buy my sizable lots. By the time I refreshed the page corrected the stop limit to a limit, the price had dropped to $0.11. Crap, I thought to myself.

Keeping in mind my lessons from Friday, I held, but illogically kept my limit at $0.12. The order executed at $0.1201, and I found myself with a ~7% profit.

I can sit around and moan about how I could have had ~$16,000 more if I would have sold on Friday morning. I can beat myself up over my admittedly greedy decision not to take a profit to help boost my gain percentage. I can, and I will. I tend to learn from my mistakes, and no one can be more critical of me than myself.

However, a profit is a profit, no matter how much it is. Stock trading is not my livelihood; I have no quotas or needs to meet. @stockguy22 once said something similar to “Some people don’t make $100 in a day in hard labor; you made that much in a morning with the click of a mouse.”

This whole debacle has left me a little listless and depressed, and a few people have noticed and inquired. Most of my friends don’t have spare money they can throw at the stock market and make an extra few hundred dollars in a month. I’m trying not to moan too much, as I know it’s like someone complaining about getting a B instead of an A when everyone else is getting Cs. I’ll recover.

I think I owe a great thanks to Brigette for enduring my doldrums and taking my mind off of things when I can’t do anything about them except worry.

But hey, tomorrow’s another day on the market. I took another position in SPNG at $0.15 and plan to hold that for a while. It’s unlikely that I’ll take a larger position until I’m more confident that the stock is no longer being influenced by pump-and-dumpers. I’ve gotten a few other recommendations, and I’m cautiously listening and filtering, trying to find that wave again.

Yesterday, Friday, June 12, 2009, was a day that I learned a lot about the perniciousness of the stock market and my own threshold of nervousness and composure.

The stock for Spongetech Delivery Systems (SPNG.OB) opened the day at $0.235, peaking at $0.29 somewhere around 11:45 I acquired Thursday an additional position at $0.2399, but only got half of what I wanted because I had the order on the table since .22 and feared that perhaps my order was too large at that price to be filled. I decided to acquire the remainder at $0.285, but managed to get it at $0.2801 near 10:45. This put my average position at $0.12, as I had nearly approximately 72,000 shares below $0.10.

Near 12:30, a massive sell-off began. The price dropped from approximately $0.285 to $0.26 in just a few minutes. It bounced back up to $0.27 around 12:45, but continued to fall after that. Idiotically, I decided to put another $500 in at $0.24, think that the drop was just a hiccup back to the opening price. Boy, was I wrong!

It nearly immediately spun out of control, dropping fast, sometimes by more than a cent between page refreshes. The ticker went red at approximately 13:15.

When it hit $0.22, I figured it was funny business. I had read some articles posted by @_thedean and some others earlier in the morning which warned of a major pump-and-dump scheme going on, and had set a stop at 20 cents in order to protect my profits, but stupidly and without real reason removed it when I saw the stock hit $0.26. I was unfamiliar with the people who posted these articles, and in my naiveté ignored them.

When SPNG hit $0.18, I knew I was in trouble. I set a stop limit at $0.13/$0.125 so that I wouldn’t go into the red (remember that my average position is $0.12). I hoped it would stop around $0.15, as that had been a level of support days earlier, but it didn’t stop there. $0.13 came and went, and my limit order never executed because the stock was at $0.11 within five minutes. I felt nauseated as a I watched my healthy green profit become a blood red loss.

SPNG dropped ~73% to $0.075 in 65 minutes. It bottomed out around 13:55. My holdings in SPNG lost $23,770 in value in 65 minutes. My nearly 200% gain dropped to a nearly 40% loss in 65 minutes.

I decided against taking any loss, as I couldn’t afford a loss of $12,000. I decided to hold on–chasers would bring the stock back up before the end of the day. Lo and behold, they did. SPNG ended the day down $0.065 at $0.175, a 27.66% loss.

I learned several lessons from this experience.

When you read troubling news, set a stop and stick to it. This was my number one error of the day. Had I adhered to this, I could have preserved profits of my sub-$.20 positions and participated in the massive buy-in which occured during the two hour rebuild of the price. This leads me to the next lesson…

If you think it’s going to tank, sell high, buy low. This is especially true for penny stocks like SPNG. Selling at $0.20 and buying back at $0.10 would have DOUBLED my holdings, and I could have had some excellent profits selling those shares at $0.175 at the end of the day.

Hope is worth nothing on the stock market. Hoping that the price will come out of free fall is like hoping that a disease is going to go away untreated. It might, but more than likely action and/or preparation is better than inaction and/or unpreparedness. Thanks to @travolto and @kosovar for reminding me of this.

Take a profit more often, even when you’re long. I’m a long trader most of the time. I hold for weeks, SPNG is no different. However, I admittedly got greedy as I watched my gains hit 100% then 200%. My initial position was at ~1400% gain at the peak yesterday. Turning ~$400 into ~$5500 is pretty awe-inspiring. However, I should have been taking profit occasionally and buying back on dips. I really should have taken a profit at the major support levels of $0.10, $0.15, $0.20, and $0.25. I may have made even more money had I done that, and I wouldn’t have been hit as hard by this fallout.

Do your own research so that you have only yourself to blame. I do this and have always done this. I rarely accept on faith anything anyone I don’t know personally tells me. I did my own research on the pump-and-dump thing, but fell to my own inexperience. This leads me to my next lesson…

When others warn you about something, listen to them, because they probably know more than you. They might be right; they might be wrong. Nonetheless, when money is involved, caution is paramount. The guys I follow on Twitter and StockTwits certainly know more than I do, but I chose to haphazardly embrace their warnings and I got burned because of my own inexperience.

If you start to go negative on a massive sell-off, it may be wise to hold. I can’t find who said it, but “you never lose until you sell.” Be careful when applying this philosophy, because once a stock hits $0, you’re screwed if you’re still holding.

Use discretion when twittering about stocks; don’t give away your stops. Someone else (@stockguy22?) said this before me. Never give away your stops. That’s private information which someone could very easily use against you. What very well may have happened yesterday is that someone with a lot of shares sold them very low, triggering enough other peoples’ stops that there were a ton of shares available on the market at a very low price. A few people made a lot of money yesterday, and lots of people lost a lot of money or didn’t get the profits they wanted yesterday.

Don’t panic. Set a goal and execute. I should have kept my stop, and when I didn’t, I should have set it higher with the clairvoyance that the stock was going to keep falling. Buying back even a penny lower would have saved some profit somewhere along the line.

What was the cause of this mess? All fingers point to profit taking. Someone on Google Finance’s SPNG board has another theory.

I invite you to check out my Twitter stream while using Nested Twitter Responses to see responses to my inquiries in my panicked state. I’ve included relevant portions below for your enjoyment. Remember that it’s in reverse order, so read bottom->up. Also, ignore the “# hours ago”, it’s valid as of the time I copied the posts from Twitter.

1. $SPNG hovering around .18 right now. If it closes above .20 after the nearly mortal wounds it took after lunch, I’ll be ecstatic about 22 hours ago from Gwibber
2. Well, if nothing else, my stock panic today will make for an excellent blog post over the weekend about 22 hours ago from Gwibber
3. @FlyingUrchin Thanks for the headsup. I’m all in on $SPNG right now, steadying my stomach after it dropped 50% at lunch, rebounding now about 22 hours ago from Gwibber in reply to FlyingUrchin
4. EVERYTHING IS FINE, NOTHING IS RUINED #FB about 22 hours ago from Gwibber
5. @HisRoyalDoognes thanks for the headsup. I’m currently all in $SPNG and hating myself for ignoring warnings of a pump and dump today about 22 hours ago from Gwibber in reply to HisRoyalDoognes
6. @cpruette profit taking. check out @_thedean as well as a few tweets earlier I made. someone called it, I ignored it in my newbosity about 22 hours ago from Gwibber in reply to cpruette
7. @cpruette I wish I had some spare cash to buy it this cheap. Contemplating selling $INAR and $ONFI for a loss and putting the money on $SPNG about 22 hours ago from Gwibber in reply to cpruette
8. I uploaded a YouTube video — Jane’s Addiction – Jane Says – Pittsburgh – 6/10/2009 http://bit.ly/RpeBG about 23 hours ago from Google
9. OK…looks like $SPNG is bouncing back up a bit. meetings for the rest of the day. getting my mind off this vomit comet for now about 23 hours ago from Gwibber
10. . @travolto so profit taking = folks sell much lower than the stock is currently worth? selling high and buying low on the way down? $SPNG about 23 hours ago from Gwibber in reply to travolto
11. Folks, I’m hitting losses on $SPNG. Explain to me the newb trader the logic behind selling a stock at 1/3 of what it’s worth and tanking it? about 23 hours ago from Gwibber
12. $SPNG my stop loss just triggered. I knew I should have kept it at .20 when I set it earlier today. @_thedean looks like I got burned about 23 hours ago from Gwibber
13. . @mikeklass yes. you can hate me for tweeting too much. Gonna be quiet for the rest of the day, though–meetings for eternity about 23 hours ago from Gwibber in reply to mikeklass
14. dammit dammit dammit $SPNG is tanking HARD HARD HARD. setting a stop at $1000 profit..will buy back in if it corrects later about 23 hours ago from Gwibber
15. crap crap crap crap crap $SPNG just nosedived. “should I stay or should I go now” this company is still sound, I think I’m staying about 24 hours ago from Gwibber
16. . @cpruette crap crap crap I just got another position at .2403 and I’m spent on cash…dunno if I can offload others fast enough to get in about 24 hours ago from Gwibber in reply to cpruette
17. uh oh…who sold $SPNG at .26? THIS IS NOT PROGRESS, PEOPLE. I don’t like being down this much on new positions…. 9:57 AM Jun 12th from Gwibber
18. @KoSoVaR and I realized that it’s your replies that mess up gwibber. I don’t know why yet, though… 9:49 AM Jun 12th from web in reply to KoSoVaR
19. @KoSoVaR negative. I ended up sticking in :-\. I’m out at 50% loss, otherwise I’m staying long. 9:48 AM Jun 12th from web in reply to KoSoVaR
20. . @cpruette moreover, I don’t think we’ll see another sub-.30 opening 9:47 AM Jun 12th from Gwibber in reply to cpruette
21. . @cpruette my trick is that I’m long on $SPNG. I salute the shorts, but I’m in until .55 or greater 9:42 AM Jun 12th from Gwibber in reply to cpruette
22. . @cpruette I don’t see SPNG slowing down anytime soon. I took a position at .2399 and .281. I should have gone bigger at .2399 :-\ 9:42 AM Jun 12th from Gwibber in reply to cpruette
23. don’t hate me ’cause I’m makin’ money. hate me ’cause you’re too lazy to try it yourself 9:33 AM Jun 12th from Gwibber
24. new $SPNG position drops my sellout price to .55 to cover my student loans. please please please let it happen. 9:15 AM Jun 12th from Gwibber
25. Ugh. I should’ve put the money I put in $SYMX and $ONFI on $SPNG instead 9:09 AM Jun 12th from Gwibber
26. taking another position at 0.285 in $SPNG. I wish I would have done that yesterday at 0.24! 8:52 AM Jun 12th from Gwibber
27. @wallstreet1929 I saw that and retweeted it. I’m watching cautiously. 8:32 AM Jun 12th from Gwibber in reply to wallstreet1929
28. Excellent article on investing in $SPNG http://is.gd/ZTLT 8:21 AM Jun 12th from Gwibber
29. ♺ @shawnp0wers: In ~4.5 years, the aliens near Alpha Centauri will wonder why they can’t watch I Love Lucy on their analog brain implants… 7:56 AM Jun 12th from Gwibber
30. $SPNG at .61 is my goal. At that price, I can sell and pay off my student loans immediately, saving $300/mo for 20 years, plus $27k interest 7:53 AM Jun 12th from Gwibber
31. $ONFI what the hell? what the hell? what the hell? Probably going to dump it if it hits 50% loss 7:31 AM Jun 12th from Gwibber
32. seriously. who just sold $ONFI for .09? This stock is probably worth .25 if peoples’ analyses are correct. 7:04 AM Jun 12th from Gwibber
33. $SPNG is my hero, but I’m not blinded by the dough it’s making me. Cautiously proceeding, hopefully we’ll see $1 soon 9:55 AM Jun 12th from Gwibber
34. @_TheDean that’s very troubling…I think I might be setting a stop today… 9:39 AM Jun 12th from Gwibber in reply to _TheDean
35. Amagamated life and stock update for June 11, 2009: I’ve been incredibly busy these past six weeks or so s.. http://twurl.nl/gizlub 8:25 PM Jun 11th from twitterfeed
36. ♺ @liberty_76: Major PA Legislative Victory Scored! 3 privacy bills passed out of committee
    http://bit.ly/vLb3X 5:14 PM Jun 11th from Gwibber
37. @lionsharevc @marxiey what’s your rationale behind $IVOB? 5:00 PM Jun 11th from Gwibber in reply to marxiey
38. currently at 179.06% gain on $SPNG on all positions. REALLY kicked myself that I didn’t go all in last Monday at 0.039 4:59 PM Jun 11th from Gwibber

With any luck, SPNG will return to .30 and continue to climb. It’s a sound company with sound financials and great products. It might just take longer to hit my target of $0.55. However, I’m proceeding cautiously, and setting my stops along the way.

It all started a year or two ago when I decided to buy $250 worth of stock in Transmeta (TMTA), which had recently released a new processor design and licensed some technology to Intel or one of the other major processor manufacturers. A few weeks later, and unbeknownst to me, TMTA performed a reverse split to increase the value of its stock and avoid delisting. The stock price went from $8 to $15 and my shares went from approximately 30 to approximately 16. The bad part is that the stock price kept dropping. It was at $12 when I decided to cut my losses and cash out. I lost approximately $32 on that venture.

I convalesced for a while, nursing my $32 wound (not a lot of money, but a chunk for a college kid). I continued to read; continued to list stocks I wanted to watch in my Google Finance porfolios.

I started again last summer (July?) with 17,000 shares of Linux Gold Corporation (LNXGF), $1,020 worth of 6 cent shares. I noticed that the stock was highly volatile: its intraday range was generally between .06 and .10. I hoped to hit that .10 sweet spot for a nice gain. Unfortunately, that day never came after I bought the stock. It stuck at .06 for days, weeks, months. Sometimes it would hit .07, but that wasn’t enough for me. One day, it hit .08, but I was busy working and didn’t catch the spike.

Eventually, I set a limit sell for .07 for 13,400 shares and .065 for the other 3,600. After commission, I got back approximately $1146, a $126, 12% profit. Not bad for someone who had idiotically lost $32 a few months prior.

I would later learn a lot more about the role of volume, and realize that it may have taken days of .10 to offload my 17,000 shares. I would have been better off farming it for that one penny gain all along: buy low, sell high.

In October 2008, the market crashed on account of several American banks’ and insurance companies’ financial insolvency and the American auto makers’ financial revelations. Stocks which were valued in the high tens were suddenly in the low tens, or even in the ones.

By the end of October, I knew that it was certainly a buyer’s market: a cautious buyer’s market, but for most stocks, the only direction to go was up.

I read up on dividends and decided that I wanted to acquire enough holdings in something that I would see some kind of divided check once a quarter. The amount didn’t really matter; I wanted the majesty of telling my father and grandfather that I made a dividend since they both love to use the phrase “it pays dividends”.

I bought 100 shares of Diana Shipping (DSX), a Greek dry shipping company. This set me back by approximately $800 (8.00/share), but the dividend which it was supposed to be paying in two or three days was .39, so I’d see a check for $39 by the end of the year. Unfortunately, I misunderstood the “holders of record” definition and didn’t get the check: I bought in a day late. I decided to hold onto it, as I knew it could only get better. DSX announced that it was suspending its dividend, though, so I was in the hole $800 and wasn’t going to get that skinny little dividend check.

I did some more research and settled on Euroseas (ESEA), another Greek dry shipping company. I got in at $5.65 knowing that, this time, I would get the dividend. It came—all $17.00 of it—and I rejoiced! I made a dividend! w00t!

Unfortunately, my call about “things only going up” was incorrect when applied to ESEA. As of this writing, it’s at $4.84, but has been growing fairly steadily since hitting a low at $3.51 in January. I got another dividend in March, though, but it was less than $10.

My positions as of Apr. 17

Since then, I acquired some cash from various sources and bought into other companies. My favorite and the poster child for my “buyer’s market” theory is Star Bulk Carriers (SBLK), another Greek dry shipper. I got in at $1.30 and again at $2.87. It’s currently at $3.01 and I’m in for the long haul. The company is nearly two years old and had a 55.98% profit margin in 2008, paying an 18 cent dividend plus new shares in December. If the dividend holds, I could see a more than $500 dividend when it’s issued in May or June.

I bought into a few other companies somewhere in there, including Level3 Communications (LVLT — made a 28% profit when sold), Taiwan Semiconductor (TSM — advised to buy by my now-former boss, still holding), and Ford Motor Company (F — made a 60% profit when sold).

Recent acquisitions include Vonage (VG) using profits from the sale of some hard assets and Converted Organics (COIN) using proceeds from the sale of F, at the behest of some reputable folks whom I’ve been following on Twitter. One guy made something like $117,000 last week — 30% profit, if I recall correctly — through JAVA, WYNN, DNDN, and a few others.

VG is poised to take off once a brokerage offloads ~400,000 shares. I’d be happy with a 10%-15% gain based on the amount I have in it. However, the theory is that it will hit .60 from its current .37-.40 range as AT&T (T) shuts down its VoIP phone service and customers flock to more proven providers such as Vonage.

COIN, on the other hand, burned me. I chased it. Kunal called it at .82-.83, but I was hasty and got in at .95 with a hefty chunk of change. I’ll sell it as soon as I can make up the cost of commission or it drops to the point that I’ve lost my profits on F.

Stocktwits is an amazing Twitter mashup which connects amateur investors with seasoned professionals and savvy part-timers. I look forward to getting in on their advice and making a dollar or two along the way. I know I’m still quite green and I don’t have a lot of time during the day to watch for spikes, so indispensable is the guidance of those whose livelihoods depend on their good calls.