Trade – WVVI – Willamette Valley Vineyards

I bought Willamette Valley Vineyards (WVVI) on 9/18 at $6.10/share. I spent some time researching this company and, financially, it looked strong. I admit I know little about the wine industry, but it seems like a great company. They are small, approximately 100 employees.

They seem quite progressive in their environmental efforts, an interesting article was posted about WVVI on the Diesel Blog.

They also appear to be quite business savvy. Realizing it may be difficult to distribute their wines to customers directly due to their small production, they have a wholesale type approach of selling their wines along with others in an effort to become a one stop shop for customers to purchase wines from. This allows them to have an additional potential profit center while allowing them a much more attractive means to sell their wines.

Trade – .MSQDY – April 2007 27.50 call

I bought Microsoft April 27.50 calls for 1.75/contract on 10/2. The stock was trading at $27.35 a share. Intrinsic value was zero, time premium was 1.75 for 6 months. Microsoft has traded in a range for years without any really significant catalysts. Their earnings continue to be strong, their position in the industry is still very strong, and they have some huge catalysts on the horizon with Vista, Zune, and continued sales/improvements on the xbox360. Purchasing equivalent amounts of the stock would have cost a considerable amount of money and the calls seemed like a long enough period to maximize the gain on the hype and initial sales of Vista, both of which I think will be strong.

For all the negative press Microsoft gets for security concerns, monopolistic practices, and poor quality software, I think they do an exceptional job at providing a great OS for corporate desktops and consumers. They have a lot of very talented employees, behave fiscally responsibly, and are mature enough in the industry to be able to continue to dominate in their areas of strength.

I also believe the hype/threat of Linux on the desktop has waned. While many technically savvy people have dabbled in running Linux on their desktop, the vast majority of home and corporate desktop users continue to use Windows. I think having competition in the market is healthy and will force Microsoft to remain competitive, but I think, when it really comes down to it, most consumers and corporate customers will stick with Windows for the forseeable future.

Trade – WSSI – WebSideStory Inc.

I sold WSSI on 9/31 for 11.98/share. I didn’t hold the stock for long. I did make a slight profit on it, but I had decided I didn’t know enough about the company and had plenty of exposure to the web analytics field with my holdings in Omniture (OMTR). I bought the stock without doing enough research and decided that holding onto it was not the best use of my cash.

Trade – .NQAW – Intel Jan 2007 17.50 call

I sold my Intel Jan 2007 calls today for 4.40/contract. The option was deep in the money and had appreciated considerably since I purchased it. I was looking to get back some of the capital that was tied up in the contracts but wanted to maintain a long position so I sold the Jan 07 deep in the money and purchased November 2006 20 calls instead.

Trade – .NQKD – Intel November 2006 20 call

I bought Intel November 2006 20 calls for 1.95/contract. The thought behind this trade was to increase leverage buy buying additional contracts with the profits gained from the Jan07 17.50 calls which were deep in the money and tying up a large amount of cash.

Instrinsic value on the option was $1.70 so I paid $0.25 for the time premium of approximately 5 weeks. Reasons for the purchase:

1) Intel has recovered nicely off its lows earlier in the year

2) They are announcing earnings tomorrow (10/16) which are expected to be good
3) Time premium seemed quite low given the volatility over the coming weeks (Earnings from Intel and AMD)

4) The November calls at a higher strike price allowed me to buy twice as many contracts still in the money with a slight margin of safety

5) I expect the consumer and business PC industry to be strong over the next several months due to the upcoming Vista launch, I expect this upcoming demand to bring additional purchasers into the stock