Thursday, November 11, 2010

11 November 2010 Ok It Was Not a Trading Holiday


11 November 2010 Ok It Was Not a Trading Holiday

My mistake and thank you for those that pointed out today was not a trading holiday. Don’t you wish it was? The poor performance today does send up a caution flag again as to whether this rally can push ahead. I think it will prevail, but if Friday is an off day with volume, we will be taking profits from the entire portfolio. If that happens, then I have to acknowledge Hutch, one of readers, for claiming, "the sky is falling the sky is falling" over a week ago.

Here is some pin action in the Salve Lucrum and other portfolios of late. We added to ACN, one of the global leaders of computer consultancy and technology providers. The dip today provided another buying opportunity. They bought a mobile app outsourcing company in China yesterday and we think this is a good service sector for them. This is a $48-52 dollar stock selling at $44 today. It is a good entry point. DO YOUR HOMEWORK The only downside I could see was that more than half of its revenue comes from outside the US, which puts in the volatile currency game.

We also added more VLCCF Knightsbridge Shipping. We have had a good run and the sector is now getting more popular. If you remember back in August we got into this and DRYS. We quickly stopped out of DRYS, but it too is looking like it broke out of a $5.00 resistance range. After some homework last night, we still prefer VLCCF.

The Salve Lucrum portfolio took another hit today as it stopped out (I did have a person ask me what that means, so be patient a second. Stopping out means that I set a predetermined sell price and the price came down enough to trigger the sale of the stock. I usually will use a Stop Limit order. That means I have decide to sell a stock at a specific price. If you use only a stop order, your stock is executed as a market sale versus a limit sale. That means you may end up giving up some of the value below your stop order. When you here me say “watch your stops” or “place your stops”, I am normally-but not always- referring to stop limit orders.) of the Israeli security company ESLT. After some nice dividends, we took a net loss of 4.4%. This is going on the watch closely list.

We also increased our loosing bet on the nat gas ETF UNG. I am down 11% on this, but feel in the long run gas will take off. If Chevron can bet 4.5 billion on nat gas I can hedge my bet a bit.

We also added to NAK and Amazon. Of note, in yesterday's WSJ there was an article about John Grisham’s new book. On the first day they sold 1 million digital copies, a record. Putnam & Sons, the publisher immediately announced that they had dropped their print run from 2.8 billion copies to 1.7 million. This will be the trend for publishers. Look for AMZN to continue its amazing climb.

Then to prove I do take my own advice, we piled into some commodity ETFs and ETNs described here over the last several days. We took fairly aggressive positions in JJG, DBA and PPLT.

He Drank Whiskey, Poncho Drank Wine. We all met down on The Rio Grande eating salted peanuts out of the can.

Yes I am speaking of The Cisco Kid and he was no friend of mine today. Really disappointing earnings and negative forward looking comments had the entire tech sector feeling like a gringo running through a field. (That song had weird lyrics.)

Again I am sorry for making you think today was not a trading. If you were trading bonds you would have been out of luck, but the market was open today. As an act of contrition (oh, got the Catholics attention with that line) here are quick reviews of two wines I had the pleasure of enjoying last night at . . . yeah you guessed it Hanna’s.

I brought in a 2005 Penfold’s Shiraz RWT. As most of you know Penfold’s is one of the oldest wineries in Australia located just outside of Adelaide. Since the 1850s it has been pumping out some of the best Aussie Reds ever made. It is the same brand responsible for one of the most collectible Australian Red Wines Penfold’s Grange. I have been watching the 2004 and 2005 Grange as they are getting incredible ratings, but at $400.00 a throw, we need a few more good months in the market before they are in my collection. But I digress; the RWT, a syrah based wine was inky dark black pour. It was pleasantly oaky, with a pepper essence and chewy fruits. As it lingered, we got a nutty and vanilla feel to it. It was really nice.

My dinner guest and I were pleasantly surprised when two of our readers joined us at the table allowing us to finish the RWT. I asked Dave Hanna, the Patrone Extrordinaire to set us up with something big and red. He blew our socks off with a 2005 Merus Cabernet Sauvignon. This was black like ink in the glass. It has a subtle sweetness to it but well balanced. Along with berryish undertones we got some coffee and earthy qualities (Probably a well balanced mineral base.) I did not think I had heard of this but was pleasantly surprised that I actually have two in my collection. We did not finish this beast last night so I was anxious to get back tonight and finish it off with my buddy Ben as we watched Baltimore almost beat Atlanta in a good football game.  Almost being the key word here.

So you got your wine review instead of a book review and I hope you are happy. Now a friend of mine (BEN) sent me an interesting video yesterday. It starred Milton Friedman and Phil Donahue. For those unfamiliar, Mr. Friedman (Passed in 2006) was a well known economist and educator and Mr. Donahue was (I say was, because he had a talk show but it died of loneliness and a self righteous attitude after 26 years on TV.  He is still a live and married to Marlo Thomas, Danny Thomas's daughter.) In the interview, Mr. Friedman makes a compelling argument for capitalism. Click here to see.

The video reminded me that buried in the archives of my Kindle’s 89 books was a copy of Friedman’s Capitalism and Freedom. I highly recommend a read if you ever wonder if socialism or communism trumps capitalism. His opinions are well vetted and supported by enormous amounts of empirical evidence.

What's That Noise?

If you have been following the news, one of our favorite stocks keeps getting dragged through the press because of one setback after another.  Of course I am talking about Boeing and the recent explosion and fire in the Roll Royce Engine on board their 787 Dreamliner.  There were rumors of in flight photos of the event, and if you promise not to distribute this I will share one with you I had the privileged of acquiring.  Here it is:
 Boeing 787 Engine Problem

And in closing this fine Thursday Night

From the Presidential "Somethings Don't Translate Well"  Gallery.  During his visit to India,President Obama was quoted as saying:

आगे बढ़ो और मेरी उंगली खींचो!

Loosely translated, you guessed it, "Go Ahead, pull my finger."

Salve Lucrum


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