Friday, August 31, 2007

LDK Up 108% - Move TS to $38.40

LDK Solar is smoking hot right now... Let's lock in at least an 81% gain by raising our Trailing Stop here to $38.40, which is 25% off today's high. I don't want to tighten the stop here, because we have more volatility ahead and we don't want to get shaken out of this position unnecessarily.

So keep an eye on the shares, and let's keep riding this one as far as she'll take us!

Good day,


Thursday, August 30, 2007

Get Happy!

Well, the markets are rebounding from the highly positive yet somehow disappointing news about the economy this morning. Here's what the AP had to say in an updated article:

"Stocks recovered from a sharp dip Thursday as weaker-than-expected economic data led Wall Street to believe chances are improving for the Federal Reserve to lower interest rates."


Okay... So... The weaker-than-expected economic data was bad news... So "Wall Street" decided this morning to sell because of the bad news. But somewhere between 9:30 and noon, this paved avenue through downtown Manhattan slapped itself on the forehead and said: "Wait a minute, since this news is so horrible, the Fed might REALLY lower interest rates now! Let's buy!"

Mokay? Mokay.

"Double Scream" on Wall Street

I was reading in this morning's AP report on the market's early weakness that:

"Stocks dropped in early trading Thursday, with Wall Street taking few chances amid concerns that shrinking credit is hurting the economy and uncertainty about the Federal Reserve's intentions."

Hmm. I wonder how one ascertains the opinion of Wall Street. Do you have to put your ear to the pavement, like a Northern Cheyenne of old would have put his ear to the ground to hear the cavalry coming from the next valley? Do you have to listen really hard to hear the "Street" tell you why the markets are down?

Anyway, I wonder how the mainstream financial press knows so much about Wall Street and what it thinks.

The reporter goes on...

"Thursday's economic data disappointed investors."

The disappointing news was that the economy is growing at its fastest pace in more than a year. But "investors" were "disappointed" so that's why the market tanked 100 points on the open this morning.

Perhaps we need to find these investors and tell them to get a grip. Especially if they're the ones who keep buying and selling on every bit of news reported by AP, which seems to rely on the investors to supply the reasons behind the up and down moves. Can you see the problem here?

It reminds me of the "double scream" scene you see in comedy movies so often, where the one person comes around a corner and suddenly runs into another person and both stand there screaming with fright at each other. (The most famous version might have been with ET and the little girl, although the Tommy Boy version where Chris Farley and David Spade were screaming at the panicked deer in their back seat was pretty good, too).

I mean just yesterday these same barking mad, constantly panicking investors were elated, as reported in the same AP article:

"The Dow Jones industrials gained nearly 250 points Wednesday after losing about 280 points in the prior session, as investors grew more optimistic about the chance of an interest rate cut and sought out bargains."

So they were optimistic yesterday. And great news hit about the economy this morning. But they weren't happy because they wanted it to be greater news. So that's why they're shooting the indexes down the toilet with mass selling this morning.

Are you following this?

Here's hoping they have some coffee and cheer up by this afternoon.


Wednesday, August 29, 2007

Our SRI Portfolio Is Up 89%

I've got good news and bad news... The bad news is that Starbucks just dipped under our entry price. The good news is that our SRI Portfolio is up 89% on the year, including all wins and losses and open trades.

Bunge (22%) and LDK Solar (85%) are leading the charge, and our weakest laggard is NMR, down about 15% from our entry price.

Overall we are of course beating the S&P 500, with all green positions, which is the stated goal of this blog. Soon I will give a detailed breakdown of our recommendations from inception of the blog so we can compare it fairly with the S&P.

The numbers here are roughish estimates and must be corrected/fine-tuned for entry dates, closed positions, and the like. Considering that we have several sizable options winners in our track record, our performance number might actually rise a little bit relative to the S&P.

Precise details to come. Meanwhile, let's continue holding. When the market stabilizes a bit... with three successive days of flat or positive price action, we'll consider adding our next play to the portfolio.



Tuesday, August 28, 2007

Nathan Writes Today's Column

Since the markets are ridiculously volatile and we're simply going to use our trailing stops to navigate this blood bath, I'm going to let my 4-year-old son Nathan write today's column... So without further ado...

Chirp chirp chirp chirp chirp chirp chirp chirp chirp chirp chirp chirp chirp chirp chirp chirp chirp chirp chirp chirp chirp chirp chirp chirp chirp... chirp... Tweet tweet tweet tweet tweet tweet tweet tweet...

Peck peck peck... Hatch hatch hatch... Peep cheep peep peep cheep peep peep... The markets are so ridiculous!

(Cue applause...)


Wednesday, August 22, 2007

Finally, Some Reserve at the Fed

Ben Bernanke's reserved response to the credit situation seems to be working if the early returns are any indication. Instead of giving the kids the big lollipop they were asking for - the promise of a Fed Funds rate cut - he gave them something sweet but healthier in the long-term: some pineapple chunks in the form of a discount rate decrease.

After losing about 50% of our Green gains during this recent market meltdown, we're slowly clawing our way back up. Starbucks, interestingly, is back in the black today for us, and is on pace to provide 40% gains to us over the next 12 months.

Even half that would be good, and is, frankly, what I'm hoping for. This stock has been savaged even through the company has hit its earnings targets... has been opening new stores in China like mushrooms... and is actively seeking solutions to its problems (higher drink prices... more localized decor... expanded product lines).

It's hard to get excited by a couple good days for the markets here. I believe we're in for more volatility ahead, and I think the Fed rate cut is not forthcoming in September (which is fine by me).

Here's the bottom line: If you don't like this volatility, and would like to see it avoided in the future, then supporting Bernanke's laissez-faire policy at the Fed makes sense. It was Greenspan's interventionist leanings and contant, artificial stimulation of the economy that created this mess in the first place.

I think Bernanke should be lauded for his handling of this situation. I believe seeking a "dynamic stability" would be best for investors, including ourselves. In other words, you need enough stimulation and volatility in the markets to keep them from going dead (stagflation)... but not so much that stocks are forever riding a dramatic roller coaster.

Bon chance,


Sunday, August 19, 2007

Um, Wow

Well, after a gut-wrenching week -- which I spent mostly at the beach and the movies in various resorts along the coast of South Carolina - all is not well.

Our portfolio has lost about 10% in recent days. We're still around 12% up for the year, thanks largely to a stalwart performance by our friend, LDK Solar. But holy moly Miss Jolie, what are we to do?

Well, there's not much to do but mind the old trailing stops and we haven't gotten near any of them yet, thankfully.

Now what about Ben? Well, he's really trying not to futz with interest rates and that's good. And I'm always in favor of not toying with rates. That's pretty much what got us into this mess in the first place.

You remember the negative interest rates Greenspan was charging for home mortgages? Wasn't that COOL? Heck, you could buy a million dollar house on the shores of the Chesapeake for about $500 a month? I mean, what fun! The coolest guys in the world headed companies with names like Beazer.

That's pretty much over with now, huh?


So, will Bernanke play with the Fed Funds rate? Or will he stay put? If he stays put, he better get an iron cup for down there, because I would imagine that Steve Schwartzman will personally travel to Washington D.C. in his slightly tarnished, solid-gold Boeing Dreamliner and deliver a swift, New Yawk-style kick to BB's gonadal region.

I still think private equity is a good business. And I think it'll continue to be good for investors long after the current credit crunch is over. But for now, the PE guys got to be sweating bullets.

As for Bernanke, I think it all depends on what happens between now and the next Fed meeting. That will determine what he does. If the market volatility calms down - even if the indexes slide a bit overall - I think Ballsy Ben will do his Gambler impersonation and "hold em."

Till then, we'll be looking for some good ways to play this madness. Commodities? Gold? Silver? Perhaps a little of each. We shall see.


Sunday, August 12, 2007

Ben Bernanke at the Starbucks

What a summer.

I just came from Broadway on the Beach, a new-made boardwalk/mall/lake near my mother in law's in Myrtle Beach. The boy had fun playing ski-ball, feeding the fish, eating funnel cake and going on the pirate ship. And I enjoyed a nice break without thinking about the markets.

But he's in bed, so here we go. First, where the heck are we?

I mean, what are we to make of the markets now, and what direction should we take for the future?

Well, we're in a period of market volatility, obviously. I remember reading awhile ago that watching the mortgage market fiasco unfold would be like watching a train wreck in slow motion.

That's precisely what it has been like this summer, no?

The big thing now is whether Bernanke will lower interest rates. I believe he will not - not at the next Fed meeting anyway.

Despite being volatile, the broad market - as measured by the S&P - is still near an all-time high. It's probably somewhat normal for a market smashing through to new highs to make people jittery.

The happiest guys in the world right now are the doomsayers. With every "see I told you so" they finally get the rush of being right - not about the future this time, but about the present!

Must be a refreshing change for them.

But alas, don't expect this far-ranging pullback to last forever. These poor devils will have to resume their auld post as "guys who are so smart they are always right eventually."

I think Bernanke's handling the Fed just right, by the way. He is apparently a non-interventionist and far less the egomaniac than his predecessor - the hang-dog puppet master Greenspan.

Greenspan was like the kid who got bored with his toys too easily - so eventually he kept trading them in for bigger and neater toys and finally received a whole economy to play with - and made the most of it. He even tries to play with his old toy now, long after it has already been handed down to his little brother. And each time he does, something bad happens because it is violating nature to play with your little brother's toys.

My point is this: Let's not get too carried away. Bernanke's playing it cool not because he's in denial - I really don't think there's anything fundamentally new going on with the economy or the markets that would require us to flee. The credit crunch is worth being concerned about obviously - and we'll monitor closely.

But I learned from a master investor, Alex Green at The Oxford Club, that market timing is - in the end - a sucker's game. We won't do that with this portfolio then.

In fact, this pandemonium will certainly allow us to find some bargains - some stocks that get mauled for no good reason - and we'll try to pounce on them. Actually we might have already found such a stock: Starbucks.

Last week amid the "Home by the Sea"-like spookiness (remember that old Genesis song?) that was the Wall Street scene, Starbucks snuck up a few points. As LDK nosedived, good old Bucks was clawing its way by inches, further away from our TS. The stock has been buggered by the markets for so long, it's ridiculous.

There is no reason this rapidly expanding, well run and strong company should have been tarred and feathered for the better part of this year - other than some garden-variety profit taking, and perhaps some hedge funds exploding like Dave Barry cows on the horizon.

Earnings are growing, expansion into the Chinese and world markets is proceeding as expected. And once again, regardless of how the markets get, we all need our caffeine do we not?

Already Starbucks is beating the market since our entry. My bet is that this ride is just beginning.

Good investing (and get out there and play with your kids, or your dog, if you got 'em),


Wednesday, August 8, 2007

LDK -- Our First Triple-Digit Gainer

LDK is up another 10% today in the wake of a Fed announcement that went over like cheesecake at a pot party. Currently the stock is trading 100% over our entry price.

We're raising the Trailing Stop to $36.85 to lock in some more gains.

Again I'll stick with my prediction that the summer markets will continue hairy for awhile but that we'll eventually come out slightly ahead of where we started back in June. Till then, mind your stops closely.


Tuesday, August 7, 2007

LDK Rockets 13.04% -- Raise TS to $33.41

I want Ben Bernanke's job.

He does nothing, and people RAVE.

Especially investors.

Today their sudden bubbliness sent stocks rebounding for a second straight day during this, the Volatile Summer. LDK was a big winner, shooting up 13% in a single day. The stock is now hovering around 80% above our entry price, so we'll raise our trailing stop to $33.14 to lock in profits now.


Remember, we've already locked in a nice gain on half this position. Now let's just mind our trailing stop here and see how far we can ride this one. Got your jock on tight? I hope so. Becasue this little Chinese solar company is in the middle of a wild fandango.

Carry on,


Thursday, August 2, 2007

Sell Half Your LDK Position - Lock In 63% Gain

Sell half your LDK position now to lock in a 63.07% gain. And move the trailing stop up on the position to $30.03, which is 25% below the current share price of $40.05. The markets are choppy and will continue to be choppy, and while we don't want to jump out of the position based on emotions (fear), we also don't want to hold on based on emotions (fear).

So we'll stick to our TS system and get out when the shares fall 25% off their current high. For now, hold onto the remainder of your position here and let's see if LDK starts another rally.

Good day,