Thursday, January 13, 2011

13 January 2011 It's Been A Hard Day's Night


13 January 2011 It's Been A Hard Day's Night

Some nights it is hard to put this thing together.

Devin and I had a great meal last night at, yeah, Hanna’s. We had the 14 ounce bone in Prime filet, but what made it incredible was the Mexican cheese infused mashed potatoes and baked Brussel sprouts. Dave, the patrone came buy to shed some happiness on us. He asked me about the blog and commenting on how we get it out almost every day sans disaster. Ironically he had been the third person who had asked similar questions.

While I do have a job that I love and a family I adore, I have enjoyed the market since 1986. In the course of a day we get about 30-35 emails regarding stock holdings strategies and economic data points. In the back round of my normal day we have Bloomberg running all day. At home I DVR Mad Money with Jim Cramer. Well actually I DVR it all by myself, Jim Cramer just happens to be the star of the show. We also read the WSJ cover to cover and peruse IBD (Investor’s Business Daily), and of course we read Barron’s cover to cover every week.

On any given day we glean pieces of information and throw them into a word document we leave open all day long. Yes we cut a paste. At the end of the day we paste the document into our blogger page and save it as a draft. After a typical evening about 9-10PM we open the draft and let the fingers dance. We walk the tightrope of creative license and plagiarism to complete the document.

Your Market Today

Jobless claims were disappointing today, but the market did not seem to notice. The PPI, Producer’s Price Index wiped away any concerns about deflation. Beyond that, despite a drop in the dollar, everything went a little sideways. Volume was not exciting. So we were goin nowhere fast.

INTC Intel reported a beat on its earnings, but if I have the energy I want to go through the SEC filings and possible listen to the earning call. We need to pay attention to this one as it is a true tell for the tech sector. Intel has lost its edge in the smart phone business. (ARMH ARM Holdings out of the UK) cleaned their clocks and continue to do so. We will do more homework in this sector and will look for the next ARMH. We did very well with them last year. (Hint, look at MIPS. Do your homework. Don’t let the 7% bump scare you off.) The options market should be a bit dicey tomorrow as there are contract closings. Hope we can catch some upside volatility.

A Play for Today

We are seeing crops and food supplies rising in prices. For year we have been seeing exploding middle classes in China and India, they like to eat. Pressure is on these counties to increase their crop yields. Modified seed will eventually be a solution. So what is a good play and how do we find them.

Go to and search company profiles for the word seed. There are 21 companies that come back at you. Some you would recognize like Monsanto and Archer Daniels Midland. We want to find a sleeper and maybe from a country that really needs the product. GRO Agria is one that come up and I believe we have talked about them before here in the blog. There is another that caught my eye because they report next week. SEED Origin Agritech Limited.

They are expected to loose 9 to 10 cents a share next Tuesday. Demand for engineered seeds are growing world wide, but China has not yet approved modified crop seed. The time is coming and when it does, it would be a real help to a small cap company like seed. Here is the play, DO YOUR HOMEWORK. Confirm that they are debt free. Make sure that my grasp of the fundamental are sound. ROE is a respectable 19.59. They have about $2.00 a share cash. Margins are nice and ROI is beautiful. So let’s make a little wager we have a nice surprise on Tuesday. Look at the May 13.00 calls for a buck a contract. We probably won’t hold them till May but will look for a 20-30% upside in a few weeks.

“Some fell into good soil, and when it grew, it produced a hundredfold."

Oh yeah.  Tonight we had Sloppy Joe's in the trailer, if you were wondering.  They were really good.
Salve Lucrum


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