Friday, January 15, 2010

BAGAKOAA; January 15, 2010 Whassup widatt?


January 15, 2010 Whassup widatt?

OK I got JP Morgan right, but that does not ease the pain of INTC.

If you have ever heard the saying “buy on the rumor, sell on the news”, this Intel reporting is the epitome of that saying. I went through all the published segments of the conference call I could find and I don’t see any reason for the pull back this morning. OK INTC was up 60%+ over the last 12 months. I noticed some swelling volume last week, about 70 million shares a day against the average of about 50 million. The import export report on the 11th had some nice things to say about the sector where Intel plays. (RUMOR=BUY) Volume trended about 70 for the next two days and the price went up about 5.1%over a three day period. Last night, after they reported, (NEWS=SELL) in after hour trading it was even higher. My calls were up 22% this morning at the opening I am now back to even on the calls and have given back about 7% of my gains in the stock itself.

I have to follow the lead of Cramer who about 9 minutes after the market number announced he was buying on the weakness. After my trade it will be my number two holding. Ha ha Jim you got in at 21.11 I got in at 21.09. (POST NOTE- Later in the day he got more even cheaper, I believe it was 20.65) I agree with Cramer’s assessment which indicates corporate spending on new faster systems is improving, I am hearing the need here at our office, the new year of the “Notebook” is booming, and Windows 7 will sell a few boxes this year. Most importantly, the forward looking multiple is cheap at 14.

OK we picked up a few new readers this week. One of them, Michael J sent me a nice note outlining his investment philosophy and recognition that we are all responsible for our own actions. He also, and I hope he does not mind, told me about one of his success over the last year. He got a triple with Fannie Mae. AND he took the profits. That is key. So many of us look at a triple (as rare as they are) and say there has to me more. Nicely done. I would assume he bought it right before or after March 09 in the 50 cent range and rang the bell at about a buck and half. Way cool. He is a braver man than I as the fundamentals would never get me into a stock like that. He admits that keeping this on his watch list is a whacky idea.

Let’s take a quick look at the fundies. ICKY! Two quarters of huge losses has put the company into conservatorship. The CEO was asked to resign (Should have been tarred and feathered and had at least one episode of AMW-America’s Most Wanted- just on him), and is now replaced by Herb Allison formerly of Merrill Lynch. He is talented and experienced. Unfortunately the company has burned through 60 billion in capital and is sitting on 194 Billion of underperforming loans. (That would be a bad thing for any of you in the US Senate and Congress, not the State assembly or city councils-I have at least two of those reading this so I must tread carefully.) Most analysts have this stock value at, hold one let me calculate it, ok take the negative numbers, add them to the other negative numbers, subtract the debt, and probable losses times the negative growth rate, and you have, oh yeah $0. That’s right analysts value this at 0. I don’t think I have ever seen a zero before. Michael, I’d say this isn’t even good enough for a watch list.

As you can see, I republished the Salve Lucrum Portfolio with the recent changes. Today was stinger. The S & P 500 was down 1 %. The proftolio was down almost 2%. I’m bummed. Looks like cheap scotch tonight. Yeah get out that dusty old bottle of Clan MacGregor. I think it can be had for about 9 dollars a bottle. Pure got rot. But hey, when you take a hit like I did today, you are goin’ for quantity not quality.

Salve Lucrum


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