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Mirkwood, Gaming Stocks, And Development Notes



LotRO’s recent Mirkwood update is actually really good. I’ve played through it completely with my main, and I’m working on an alt.

It’s clear the small LotRO team is working very hard, and they deserve some accolades for some of the highest quality content LotRO has seen in a long time.

The player base in general seems a little detached and apathetic, however. I’m concerned that the difficulty level of Mordor, and again of Mirkwood, may have expelled a significant number of players.

LotRO’s most recent update completely revamped the character selection panel, with overall improved results. Today I uploaded an update to my custom interface, which repairs some of the damage caused by the interface changes.


Gaming Stocks


The past month and the week before last saw record inflows into ETFs according to CNBC. I take these flows to be average people, including mom and pop, chasing this bounce. This is BEARISH, not bullish. it’s also stupid at this time of record uncertainty, risk, and rising interest rates.

These investors were face planted this week when the market crashed again due to various factors, especially Trump’s trade war with China.

Friday’s drop took the S&P index exactly to the critical level it needs to hold relative to the previous low several weeks ago.

The overall sentiment on Wall Street is that it won’t hold, which is my sentiment also. This is why I’ve been taking profits for the last month.

In my last post I bought Google and sold Albemarle. I took quick profits in Google after that. I more recently sold Nvidia (NVDA) and Tencent (TCEHY) both for 120% gains.

I’m currently as little exposed to the market as I’ve been in a very long time. I actually tried to go short the market at the recent top, but got shook out, missing a huge gain to date in inverse 2x short S&P (SDS).

In that case I broke one of my rules, which is to wait until the very end of a day before allowing myself to get shaken out on a high conviction trade.

I was distracted by real life and couldn’t deal with having that much money on the table, basically. I really need to get past that and make 2x or 3x bets.

If you’re currently in the market, then I think it’s too late to sell anything. I also think it’s too early to risk buying, but we’ll just see. Let’s break down individual equities.

NVidia (NVDA) should be watched for a buying opportunity on this pullback, but it has all sorts of issues and headwinds:

1. Amazon and Google said they will start making their own chips (i.e. so they aren’t held hostage, are more secure due to proprietary, and don’t have to pay NVidia’s 50% margins.)

2. Self-driving cars are higher risk since the fatality last week in Phoenix. Uber suspended its testing, and Uber uses NVidia chips.

3. AMD strongly asserts it will take market share this year, presumably from NVidia.

4. China says it plans to make more of its own chips, presumably to be less dependent on the U.S., which actually tends to block Chinese chips and devices for security reasons.

Tencent said this week that their mobile games sales have weakened in China. Gamers are migrating to more sophisticated, less dumb games, like the PC games offered by Netease (NTES). This is a risk across the industry.

This is good news though for people like me who hate dumbed down games. I’ve been predicting a resurgence of the PC for years due to this exact effect. I also predicted a difficult year for game developers this year, because of increased competition.

Jim Cramer was championing Activision Blizzard (ATVI) on his show last week. He said ATVI is making a new modern Disney. That’s a bold claim.

Meanwhile, Blizzard’s Hearthstone is offering ever-increasing free stuff, including a much more generous 70 packs for the expansion purchase, instead of 60.

This seems to say they need to sweeten the pot to keep their customers, who are pressuring them publicly about the expensiveness of Hearthstone.


Current Picks


Currently my only gaming stock holding is a moderate position in the GAMR ETF. NVidia and Tencent moved from the portfolio to the watch list. Other stocks on my watch list are Taiwan Semiconductor (TSM), Albemarle (ALB), Equinix(EQIX), Labcorp (LH), and Visa (V).

TSM is pressured by a very strong drawdown in the chip industry right now, but it’s a huge independent chip fabricator, so it might benefit from China vs. U.S. chip wars, especially as a subcontractor if China pushes faster to become independent of the U.S. chip makers.

Visa has strong relative strength and, while TSM is hurt right now by being a part of chip ETFs, Visa is a big part of financial ETFs, which are expected to benefit from rising interest rates.

Equinix (EQIX) is my white whale. For years I’ve missed every opportunity at this stock. At some point, the real estate ETFs (REITs), will stop being pressured by rising interest rates, which, as I understand it, hurt these companies due to the high debt these run.

It would be very profitable to have the savvy to get back into the REITs at the right time during this rising interest rate cycle.

I don’t have the experience to know when that is, but I really like investing in internet operation infrastructure, which is mostly dependent on internet bandwidth usage, and less related to sales of chips and software. Maybe I could research this in the charts going back several years to prior cycles.


Personal Project


Today and yesterday I was watching Harry Potter movies over and over on HBO Now, trying to understand why some of them (i.e. Prisoner of Azkaban) are better than others (i.e. Chamber of Secrets.)

I think it’s better characters, conflict, and lots of amazing magical things happening, but I should put my observations and writer insights into another blog topic.

I’ve also been working hard on the story and art for my game, as usual. The above image for this post is from the “evil” tavern, where the general bad guys hang out.

You know – the evil wizards, the demons, etc. I won’t say pirates because in my game the pirates are counted as good guys. They are free humans, rebels against the dark Lord whose laws say all humans must be registered slaves.

I’m also still reading about fairy magic and lore. Supposedly the power of 5 (the pentagram) is more normally used and powerful for fairies than the power of 3. Good to know, because I was going with 3.

The Harry Potter movies notably don’t have a lot of pentagrams or other provocative imagery hanging around. Harry does form a trinity with Ron and Hermione, however.

And a final thanks to the one person last month who bought a copy of one of my books. Thanks for the cheeseburger, amigo…

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North Mirkwood, Wow Multiclassing, Hearthstone, Etc.


Massively reported this week on the Northern Mirkwood update 22 for LotRO. I’m patching LotRO now. I’m morbidly curious to see if I’m kicked out of my LotRO kinship for inactivity, for like the 10th time.

When I finished the main story of Mordor (for all I know, there could be more of it now, honestly), I had no interest in grinding gear whatsoever. Just too much grinding, and confusing.

The sight of Mirkwood has me vaguely interested, since I’ve been completely unable to find an MMO replacement. My one month back in WoW didn’t persuade me to spend the next decade of my life grinding that game.

Massively wrote a speculative piece on WoW multi-classing this week. My main problem with WoW has always been the classes just never sticking with me. Are the classes in WoW just “dumbed down”? Maybe that’s why I’ve spent more time playing Rift than WoW.

Rift lost me on too many loot box and cash shop shenanigans, among other things. Hearthstone is pushing more promotional roulette wheel stuff, but effort you make in Hearthstone is never completely lost.

You can always dust your cards down the road (aka gear), use them in wild, etc. Maybe the Mech tribe will make a comeback, and unused cards will suddenly be playable, etc. Everyone wishes there were more achievements and things to do in Hearthstone though.

Politics and Market Commentary

The bounce. Is it a real ‘V’, or are we going down again? The news that Mueller is charging Russians for election meddling, but not the Trump campaign (yet), seems to take some steam off of the overhead of political risks in the short term. Yeah.

The initial big surge was the dip buyers, but after many, many months of no dips, that was expected. Some analysts insist the unwinding of volatility trades, among other things, will take weeks, not ten days, but things are looking pretty stable.

I went back big into GOOGL at the first of the week, because I liked the market action. I’m up 3%. The daily action looks fairly orderly to me, with money being put to work, not so much FOMO.

I am up 12% on RHT (RedHat) since last week, which is crazy. I mentioned LH (Labcorp) last week, and that has been insane too. I wish now that I had pushed. I would buy LH on another dip if we have one.

I sold ALB (Albemarle) already yesterday (Friday) at the peak of the market, within minutes of the announcement that Rosenstein was going to make a prepared statement. That was good timing.

I took 6% in ALB, and the reason I sold is that the dollar is holding support and bouncing, instead of breaking still lower. Kevin O’Leary stated he thinks the dollar has found a bottom, and he is acting accordingly. So, I decided maybe it’s a good idea to protect my profits.

Also, the breadth on this bounce is really not there. If the breadth increases on Mom and Pop Monday (Tuesday, this week due to holiday), then we could have a FOMO situation.

If FOMO hits this coming week, we could see panic buying into a double top pattern, and then who knows. Another big drop could cause lasting damage to morale of dip buyers. If breadth declines, then caveat emptor even more.

Personal

Ok, LotRO is done patching. Time to look up my password, log in, and see what happens. I see a lot of people in Mordor. I see the normal amount of people in both kins (on both accounts.) I see bands playing in Bree (on Landroval.)

So pretty much situation normal. I have no idea what to do, though. Maybe just wait for Mirkwood. I’m not grinding Mordor gear. Today I have a bunch of art to do for my game project, anyway.

A drawing of a fairy. A gnome merchant, maybe with a burro. Or maybe a flying transport carpet? My world is pretty low/medium magic though.

Maybe it shouldn’t be low magic? Maybe that’s just lazy and unimaginative?

I really improved my interface last week, and I put up a new splash screen for module three on Deviant Art.


Stock Market: Stacking Bleeds, And “Brain Hacking”

saturnine ball
So. The image above is from my game project. It’s the “Saturnine Ball”. It’s a gnomish invention, basically a very depressed magic 8-ball that you might encounter in module 2, if you make the right choices. It seems appropriate at the moment.


Gaming Stocks


As I wrote in my last post a month ago, the stock market was showing signs of a market top, with record numbers of moms and pops throwing money at a stock market going parabolic (vertical). I predicted a major pullback, and it has arrived.

I nibbled near the bottom of the first dip Tuesday morning, then sold back other equities late this afternoon when the market dropped again and passed the first levels, so I’m back to my initial level of investment (about 50%).

As of this afternoon, signs are pointing more towards this being a major crapstorm.

One problem of many is that everyone is still bullish. Our most recent big correction was in January 2016. That was triggered by a crash in oil. A lot of people then, including very big names, were saying to get out. Sell.

This time some of those same people, i.e. Carl Icahn, are saying no worries. This is actually very worrying, and illustrates how everyone is on the same side of the bull boat even after a week of selling.

According to Jim Cramer and others, the main cause of this market crash is leveraged investment instruments tied to volatility. Volatility exploded, and so did these investment vehicles. So big fund managers need to sell to cover their losses.

Meanwhile, the Trump administration announced they are pushing ahead towards a trade war with China in coming weeks. (I actually read the south China newspaper most days.) Rex Tillerson is getting some good street cred lately though, and he’s on the case.

There is also another government shutdown possible. I can also see Russia doing something politically horrible during the Olympics, since they were officially banned. Oil is also threatening to crash partly due to fears related to Venezuela sanctions. Shorting oil is a trade I’ve been looking at (SCO ETF). As normal, I’m too timid.

This might actually be “the big one.” This week so far is the worst since 2008 for the Dow, and since 2011 for the S&P. Milder pullbacks in 2016 took over 6 months of consolidation and fear before the market could move higher.

At the moment, I’ve taken small profits in Google and NetEase, and I’ve switched over to the Albemarle I’ve been wanting, and a half position in Redhat because I dream of a world free of Microsoft’s bloated leeching. So I’m not any more or less invested in the market since last August.

NetEase (NTES, major Chinese online game publisher and distributor), had a horrible earnings report yesterday, citing increased expenses and competition. That’s why I sold. This is basically my prediction for all of 2018 for gaming stocks – increased competition and more difficulty.

Take Two (TTWO) disappointed on earnings yesterday and was punished. The CEO, Strauss Zelnick, appeared on CNBC today for damage control. He talked up the numbers for GTA online. What? GTA: Online is ancient news, dude. I hope your sexist caveman game company dies in a fire.

Blizzard’s report today was excellent, in contrast.

NVidia crushed earnings even more than Blizzard, and is soaring today after hours. NVidia is close to my largest position, along with Alibaba and Tencent,all of which are up so much that they would have to drop another 50% before I would be concerned.

So I’m being patient right now. I’ll be looking to fill out my position in Red Hat at a lower level. I might add LabCorp(LH) to fill out my healthcare exposure. I’m also curious about Oak Tree Capital (OAK), which is getting hit hard along with all financials today. Basically stocks with very strong earnings reports, which are getting slaughtered regardless by the broad market.

Intel also looks more interesting and affordable as a gaming-related play (INTC). Chip stocks have been especially hurt (except NVidia). This is also a chance to buy Amazon or other favorite tech stocks.

Should I consider going back big into Blizzard for one more year? Or was Hearthstone and Overwatch a long-term peak, and they will need a new generation of games soon? It’s very hard for me to believe in longevity and customer loyalty in video games, enough to support these ESport leagues and therefore ongoing increases in revenues and profits.

Gamers are fickle creatures.

Square (SQ) is also interesting, but I’ve decided payments processing is just too vulnerable to long term disruption. Visa (V) may get a bump from the Olympics, but the Olympics might not be super-spectated. They always run commercials? I have no idea about the world of payments. Investing there would be just rolling dice.

Interest rates are currently rising in an uncontrolled way, which is another big problem. This is putting pressure on central bankers worldwide, putting more risk on risk assets, and also on “zombie corporations” that are only alive with massive debt on easy financing.

I’m curious about Oaktree Capital Group . It specializes in distressed debt. OAK is also an elf stock! Because “Oaktree”. Obviously.

I also still have EQIX on my long-term watchlist, which is a major data center lessor and operator. It’s under long-term pressure from rising interest rates however, because it is lumped heavily into real estate (REIT) ETFs, seemingly more than the telecoms.

It’s tempting to go all-in on the market here, but 2018 is likely going to be a long and difficult year in the stock market. I think a market drawdown of 20% is possible, especially if this fed “unwinding” of easing puts pressure on systems in unexpected and disastrous ways, which doomsayers have been predicting for quite a while now.


Gaming And Addiction


I’m so frustrated with Hearthstone. The long-awaited ranked revamp is a no-effort whatever. No game mode in Hearthstone is worth spending real-life time playing.

The rewards are trivial compared to the hours you spend making progress. In the case of arena, you actually mathematically lose gold. Meanwhile Blizzard nerfed some cards (be sure to go in and dust them), and there is an enticing new “deal” to buy 30 card packs for $20.

I’ve also tried to play some Tunnels and Trolls modules this week, for ideas and insight towards my own game project. I die every time!

Last night I was eaten by five vampire bats in Buffalo Castle! I died repeatedly in Naked Doom because I played as an elf with low Constitution! I only played for like 5 minutes. So that isn’t fun. But tonight I am back at it.

Hearthstone’s kobold dungeon has a similar brutal design principle. I wonder if brutality, hopeless suffering, and many deaths is actually addictive?

Roger MacNamee was saying on the Bill Maher show last Friday that social media is insidiously designed to addict us with articles that give a strong negative emotional reaction. Getting angry or afraid hacks our brains into creating an emotional bond through enhanced engagement.

The same concept is clearly relevant to video games.

So video game companies are creating addictive games with as many gambling mechanics as they can cram in, combined with emotion and frustration, and then shaking down kids for more and more of their lunch money, which will give better cards/gear to alleviate the pain.

The reason I can’t let go of Hearthstone, and its overly expensive costs, its absurd lack of class balance, and fumbling out-of-touch devs, probably involves various forms of addiction, sense of being too invested to quit, etc.


New Awesome MMO’s On The Way!


No. Not really. I can’t find any. Someone please make a new great fantasy MMO!

I looked at FFXIV:ARR this week. The last “news update” on their official website was from 2015. Their other official site link is an unreadable mobile-friendly eyestrain-fest. Good job, CM’s. But still, you know there are some sweet catgirls playing FFXIV.

I also looked at some Elder Scrolls gameplay on Twitch, and I just can’t do it. I’ve tried ESO a couple times, and I don’t like the interface, the lack of auction house, basically the whole MMO-designed-for-consoles thing.

So I’m looking at Pillars of Eternity II: Deadfire coming this spring, but I need to finish the first one first. It’s installed! We’ll see. Happy gaming, and thanks for reading.


New Years Shopping, Gaming, Developing, Resolutions


Gaming

In the last six weeks, I played a month of WoW and gained 10 levels. I almost reached Legion, but not quite. I played WoW for one month last year, and almost reached Warlords of Draenor. So I’m basically playing an expansion behind, when nothing you do really matters except leveling.

I’m glad I’m dodging that enormous endgame time sink, but I’m happy for people who collect chieves and pets. Sometimes I wish I had always kept up.

Instead, I played Hearthstone. I cleared the Kobolds dungeons with all classes on two accounts, earning the candle cardback. I love how the cardback is matte and waxy. It’s a detail that some might miss. It’s a pretty card.

I also started playing two accounts and two regions. So I can complete quests against myself. This means I get quests done in a tiny fraction of the time, and basically I get 4x as much gold and freebies towards a split collection.

I also get to play a lot more ranked games from 20-25, which are relaxing and fun.


Game Shopping

This weekend I ordered a Razr Naga Chroma from Amazon, on an enticing sale at $45. I hope the mechanical programmable buttons will speed up the thousand hours I’ll spend using Photoshop in 2018, more so than games.

The only game I purchased this season was the Kobolds pre-order for Hearthstone, and starter bundles for my expanded accounts.

I also bought two more snake lights from Ikea, so I can draw at my computer now with 4 lights. (See image.) The days are too short and cloudy to rely on sunlight, even in Arizona.

I also bought a new fairy compendium, “The Faerie Handbook“, which I expect will be inspirational. I’ve also been reading “The Witches Guide To Fairy Folk,” as research for my game project.


Gaming Stocks

The market is pausing. A seasonal expected rally fizzled a little bit. Reports last fall said record numbers of moms and pops pushed money into the stock market this year.

This is bearish, since it typically happens at market tops.

Materials stocks just jumped on talk of a spending bill in congress coming for ‘make america great again by fixing all the broken shit’, but we’ll have to see if the bill is big or successful. It doesn’t seem to offer much benefit for the super rich, unless it’s another big ripoff of public funds.

An explosion of world turmoil, thanks in significant part to Trump, is also very bearish. CNN reports that a rail station and multiple municipal projects in Israel will bear Trump’s name, adding more evidence to my anti-Christ theory.

This guy worships money, lies constantly – the list is endless. He is the picture of sin. The list of more heinous people to name places after in Israel is pretty short.

So for the last two months, I’ve been looking for a big market pullback in January. I’m watching to possibly add Blizzard (ATVI), Sony (SNE), Square (SQ), ANET, EQIX, WDC, RHT, ALB, JD, and V, depending on what seems to fit my portfolio.

I need exposure to financials and pretty much everything other than tech, especially after selling Dow chemical before they merged with DuPont, and missing the big run in Valero that I mentioned in a previous post. I also need something other than U.S. and China.


Game Project

Believe it or not, I’ve been working very hard on my game project. I’m getting close to having four modules completed. This is over 100 scenes and upwards of 200 dialog speakers.

I’ve needed tons of textures, so I’ve been out with my phone taking photos. I spent my New Year’s Eve painting a scene with a gnome professor in the science building, straightening out my expanding texture library, and watching Kripparian playing Hearthstone blindfolded on Twitch.

Currently most major game systems and coding are in my game, except for combat. Saving progress and shopping for things also need to be firmed up. I’m fairly happy with how my spells are working. (Keep it simple, stupid.)

I also want to support HTH as an alternative to solving problems (hand to hand, a game abbreviation fo unarmed or staff/kung fu combat, since humans are not allowed to carry or wield actual weapons in the lands of the Seelie, without special Court dispensation.)

I also want to add another review panel that records all game feedback. I show dice rolls and results, but I don’t break them down in detail.

Today and this week I am trying to finish a module dedicated to touring the school, hunting for clues to the inevitable mystery, meeting interesting professors and people, finding the door to the school dungeon, and learning about how to use the haunted library.

My worst weakness as a developer is boringness and lack of imagination. I’d like to binge watch all of the Harry Potter movies, which are being featured on Netflix. I need lots more immersion in faeries, wizards, and magical worlds.


New Year/s Resolutions

I only have one – to stay healthy. If I die of a heart attack or cancer, I can’t finish my game project. #sad

I can’t even make my first real dungeon! Yes, the Owl River school has a ‘dungeon’ of sorts, just like Hogwarts. The first dangerous area is actually a small port town environment.

One good thing to note – my constant contemplation of fairies, elves, and the Underworld is making me a more spiritual person. I have to think spiritually to weigh and consider how to represent everything related to other realms and luminous beings.

And honestly, the human life with its petty interests and concerns seems pretty bland and stupid.


Amazon Promises LotR TV series, Delivers Golden Packs For Hearthstone


I’ve been exhausted lately. In the last week, I completed season 12 objectives of Diablo 3, in bed. I can only say this was a satisfying single-player experience. And post a pic.


Lord of The Rings TV Show


Amazon announced a LotR TV series today, which is mind-blowing. There is no date set yet, and no cast, but they say they are committing to multiple seasons. This commitment must be a licensing thing.

What stories could they tell? Gandalf and Aragorn were very active between the Hobbit and Fellowship, but I’m not a lore expert. I just hope there are as many hobbits and elves as bearded men with wenches and big swords.

It’s been a while since I really looked forward to a TV show. I’m currently an Amazon Prime subscriber. Amazon now allows monthly subs, which is very cheap for a lot of value.

Sub for a month, watch the shows, order your stuff, unsub, for around $10. Plus right now you get a golden Hearthstone pack in Twitch loot. Not bad.


Diablo 3


As a mostly clueless Diablo 3 newbie, the season reset offered a good opportunity to create a new character and learn how to play the game. The difficulty and learning curve were perfect.

So I beat a “Greater Rift” in 15 minutes on difficulty 20 to complete the season, and now I have a level 70, 75 paragon Monk with a shiny gold hero portrait, and a complete Uliana set and build.

I thought I’d like the angel wings reward, but they’re a bit much.


Hearthstone


Blizz announced a new expansion, Kobolds and Catacombs. The theme has a nice Disney flavor and introduces a new single-player dungeon game mode.

No one is really sure if the mode will be good, or why Blizzard devoted development resources to this mode, or why people will play this mode, since they say it offers no real rewards.

The introduction of “legendary weapon” class cards in Kobolds is also a little ‘meh’. Just a good excuse to create overpowered cards that people have to have, and craft.


Gaming Stocks


Take Two (TTWO) and NVidia (NVDA) were two big winners in the last two weeks of quarterly gaming company earnings reports. Electronic Arts (EA) had the weakest results of the big three developers/publishers in focus on Wall Street.

Activision Blizzard (ATVI) was somewhere in the middle.

Blizzard still soared last week on news of record-breaking release for Call of Duty: WW2, but then sold off again on general market weakness.

I purchased EA and held for a week up to the day of earnings, and sold before earnings for a very slim profit.

I also purchased Disney (DIS) within minutes of the rumor that they were talking to Fox studios about a purchase.

Disney went up, but I was not willing to hold through earnings. I washed out at break even. Earnings ended up bad, as I predicted. But it didn’t matter! The stock kept running anyway based on hopes and the force (Star Wars).

So Disney looks bullish into the movie release, but buying and holding seems a little premature to me. Analysts are predicting intense competition for the video game space. Why not also for entertainment in general.

I finally sold JD (JD.com) at break even, since I am already overweight China e-commerce with a double in Alibaba, and would rather diversify more in emerging markets (EEM) during a downturn. I didn’t realize JD announces earnings this Monday, though.

JD will probably soar immediately now that I sold, of course, but even if it jumped 10%, it would still be the weakest stock in my portfolio.

I am watching ANET (Arista Networks), and wondering if it isn’t too late to get in. I’m watching Z, ALB, APA, and CTRP. Broad market risks right now are very difficult. Since I’m obviously very risk averse, I’m still waiting for another serious dip.

There is speculation that people have been waiting to sell stocks this year, hoping for tax breaks that will be in force next year.

So January could be unusually bearish, but this week Congress suggested legislation maybe closer to 2019, and that’s partly where the market weakness came from in the last few trading days. Then there would be no point in waiting until January to sell.


Holiday Gaming!


Holidays. Vacation breaks. Good times. I already pre-purchased the Hearthstone expansion.

I’m very interested in CoD:WW2, since I’ve always preferred historical or diabolical shooters over other kinds, but I really want to buy CoD on the Blizzard launcher. Blizz added an Activision section to their launcher, featuring only Destiny 2, but that’s it.

Players are griping and DansGaming about this, but I’m fine. I really like the Blizzard launcher, except it is a bit of a resource hog. Are they going to add CoD? If so, I would rather have all my games on the Blizz launcher than have to load Steam.

That’s it. I’m trying really hard to get back to work on my game project. Next post will probably be post Kobolds and Catacombs. Happy holidays, and happy gaming.