Saturday, October 03, 2009

BAGAKOAA Sep 23, 2009

BAGAKOAA * September 23, 2009 This might be a couple of days early, but there is a lot going on and I am looking forward to heading off to Utah this weekend. I got to hook up with my golf buddies this weekend and had the honor of talking shop with one of our readers and someone whose opinion about the market I respect. Just trust me that his knowledge and experience is significant. He was one, of if not the very first person to say the sky is falling way back when we all bathed in the land of milk and honey. I was mentioning certain aspects of the market and he gave me a unique perspective on consumer or shall I say investor confidence. He explained there are two types of happy. That is to say, happy for a fortunate outcome versus happy for avoiding an unfortunate outcome. He indicates that many of the people who used to be in the market are just happy not to have lost everything and that the entire world did not come to an end so on a relative basis, people are happy. That insight along with some other ideas made the round of golf quite enjoyable. My game was for shinola, but it was a good day. Thank you Tim. I had a few of my stops trigger this week and want you to know as I have mentioned these in past notes. I am completely out of GVA, Granite Construction after an 8% drop. I did not follow my own discipline as I jump in with both feet. If I had bought in slowly over a two week period, it might have made a difference or at least lessened the pain. Sorry if you followed me on this one. I will take another look at the fundies over the weekend and decide if the lower price is a better entry point. I think I mentioned I am out of PEP and took a slight profit. I am out of a homebuilder ETF (XHB) after squeaking out enough profit to pay for the trade. I have set a limit buy on this at 14.25. If I catch it, that is a better entry point. If I catch it, I am looking for a 17.50 exit point by years end. A few notes ago I mentioned MED, Medifast I have been in and out of this since June. I got back in the first week of August. In looking at the fundamentals again this week, I decided it was time to take a nice 40% profit. I initiated a position in APC, Anadarko Petroleum. I am in small and added to the position today. I will listen to the last conference call and comb the last earnings report. This came up in unrelated stories on IBD, WSJ and MadMoney. Schwab like this as does Ned Davis and Credit Suisse. It is a good Nat Gas Play, but speculative so please do your won homework. I also got in to a small Chinese Jewelry maker called FUQI. As my normal practice, I set my stop at 8% below my buy and it triggered 3 days later. Rodman & Renshaw, (have never heard of them) downgraded the stock and it got whacked. I discovered this in the IBD, but now that I look at it, it does not belong in my bundle of toys. I hope some of you got on the Apple cart. As I mentioned last week, Cramer tipped his hand about new FASB standards and how it will impact AAPL. Low and behold in today’s WSJ Page 5c is the article with all of the details. Here is a small quote from the article: “Apple Inc. is expected to be one of the beneficiaries of the new rules, because it would change how the company reports revenue from its iPhone. Currently, Apple recognizes iPhone revenue over a two-year period, and said recently that overall revenue and earnings in its latest quarter would have been much higher if it didn't have to defer revenue for the iPhone and its Apple TV product. An Apple spokesman couldn't be reached for comment.” If you got in last week when I mentioned this, (a.m. on the 16th) you would be looking at a nice 4% pop. Keep in mind Cramer has moved his target price from 200 to 264. It closed today at $186.00. (+36.2%) So what pray tell is in the works this and next week. The G-20 meets in Pittsburgh. They need to get a new travel agent. Listen for tells about a global exit plan for stimulus packages, capital flow legislation, and banking restrictions. Initial unemployment numbers come out tomorrow. Estimates are in the range of 5,000 more for a total of 550,000. I am guessing a decrease in initial claims. Let see how this holds up. The Energy Information Administration announces Nat Gas inventories tomorrow. I actually care about this number now due to positions in XTO +8.2%, APC+3.4%, and FCG+2.9%. It would be nice if inventories are down to help support the price, but I doubt it. Until that industry gets in bed with the Parliament of Whores in D.C., LNG is going to stay in the 3-5 range. Friday new home sales and the Michigan “how giddy is the consumer” index get’s released. Both should be positive numbers but most of the euphoria is already built into the market. I am of course being a bit facetious as the market volume has been lackluster with only the 18th showing any signs of life. In closing I am reading a great book right now. Actually I am reading two great books right now, but I can’t figure out how to make money with Dan Brown’s new book, “The Last Symbol”. Get it it’s a grabber your gonna love it better than DVC and almost as much as Angels and Demons. Anyway, the book isVitaliy Katsenelson’s Active Value Investing. His explanations of secular bull, bear and “range bound markets” is very enlightening. The concept of PE compression is interesting as well. It is not as technical as you might think, but you gotta love Value Investing to get through the financial statement sections. I recommend this so much that if you get it and don’t like I will buy it off you. SALVE LUCRUM** Brian * New comers that means Boys And Girls And Kids Of All Ages ** New comers that is a rough translation from the Latin “Hurrah from Profit”


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