24 January 2011 TWA Thoughts, Words, and Actions
24 January 2011 TWA Thoughts, Words, and Actions
We mentioned the conflicting sentiment in the articles in Barron’s this weekend. The comments were bullish with a harbored tinge of restraint. We’ll there was little restraint today in the market. Out of the gate the market was a little flat, but AAPL started to dance as IBM had a good report and Intel announced another 10 billion in buybacks and industrials and materials reacted to weaker dollar by climbing a bit. Only the financial sector had an anchor effect of the market. The dollar dropped because the European Central Bank was talking about tapping the breaks with interest rate jumps, just talking so far. When our tomato sandwich from Hanna’s cleared the gullet, the market was up7.49 points on the S & P. The Dow was up 108. market volume was healthy and we will guess the IBD Accum/Dist grade will go to B+, but oil slid back a bit as there are whispers that OPEC will start pumping and releasing more of the black gooey stuff. Most of the positive action was in the large cap stocks. Some say small caps are like the canary in the mine and they have not been fairing well over the last several sessions. That could be one more tell for a correction.
In the portfolio today, We bought back the February puts we sold for DF Dean Foods for a 54% gain. That was the first time we have ever sold a put so it is a nice little victory. We bought more VIFL Food Technology Service, Inc. owns and operates an irradiation facility in Mulberry, Florida. Its irradiation facility uses gamma radiation to provide contract sterilization services to the medical device, food, and consumer goods industries, as well as Cobalt 60 for the sterilization of medical, surgical, pharmaceutical, and packaging materials. This continues to do well and after taking some profit a week or so ago we want to re-accumulate. We also took a nice 45% profit on our April calls for WM Waste Management. Now we also initiated a new call position on WM. It is a July 39 dollar call and we picked some up at 95 cents a contract. We will be looking for a 30% pop on those. WM is a great company and we have it long as one of our core holdings. The stall in the financials triggered some stops in ZION Zions Bancorporation, a multi bank holding company, provides various banking and related products and services in the United States. and BOH Bank of Hawaii Corporation operates as the holding company for Bank of Hawaii that provides a range of financial services and products in Hawaii and the Pacific Islands. We enjoyed a 15.2% gain on ZION on the shares we did sell and a 7% gain on the BOH. We still like these stocks and will try and get back in soon. And in another sale today due to a trailing stop, we took some of our BWC The Babcock & Wilcox Company manufactures power generation systems and nuclear components in the United States and internationally, off the table with a 31-40% gain. It is hard to tell since our original position was due to a spin off from MDR McDermott International, Inc., through its subsidiaries, operates as an engineering and construction company worldwide. Although not a trade, the 10 billion dollar buyback for INTC Intel should improve our holding in this equity. Also, we had some weak same store numbers for December for MCD McDonalds, but some promising forward looking comments. Not in our portfolio but of note, HTZ Hertz Gloabl had some very nice forward looking guidance. AMGN Amgen, just the opposite, same clouds on the horizon. DO YOUR HOMEWORK.
TWA Two Outa three aint bad
Thoughts, Words and Actions. If you can’t tell we read a lot of stuff about the economy and stocks and investing. What we have seen over the last 5-6 weeks is a subtle shift from the acknowledgement of a rally in November, to a skeptical acceptance of improving numbers, to a concern about the market being overbought. We have gone from thoughts which were not well communicated to words, when Barron’s, The Journal, IBD and others began to speak positively about the slowly improving economy and Wall Street’s reaction to the news to analysts bumping up target pricing and giving glorious earnings guidance for 2011. Now we are seeing a “sleep walk” to high highs in the Dow and S & P. (by sleepwalk we mean little or minimal volume). This week as in last week we are reading the words of those concerned about how much the Fed has puffed up the market and what are the real values behind some of these rising P\E Ratios. That would mean the next step is action. Do you think the action will be exuberant buying or passionate desperate selling or responsible profit taking? Your guess is as good as mine.
I Want To Shake His Hand, He Made My Baby Fall In Love With Me
In 1961 Barry Man recorded a calssic song. HU Put The Bomp in the Bomp say Bomp say Bomp? Hu put the ram in the rama-lama-ding dong. Well President Obama did want to shake his hand.