Time to Add SBUX to the Portfolio

Today we're adding Starbucks to the Evergreen Portfolio... Here's why...

The economy is growing, posting a 3.4% rate of growth in the second quarter over 0.6% for the first quarter. Business spending helped spur the increased vigor, according to the Commerce Department report.

Spending and consumer products like SBUX go well together and we could be catching a wave with this one. The stock has been eviscerated this year so far, trading about 23% off it's high hit in January... but it has begun rising in recent days and could continue with some help from the broad markets (even a little!).

There is no sound fundamental reason for this price decline, with same store sales growing modestly, tremendous expansion into the Chinese market, and a renewed focus on the core appeal of the company (the quality of the stores - the "experience" and the coffee).

The other good news is that SBUX has begun showing signs of life. And the company just announced a 9 cent per drink price increase that should help its margins significantly (meanwhile, caffeine addicts like me will continue lining up - we just can't help ourselves).

Of course SBUX has killer SRI credentials: it gives all employees benefits... it minimizes product packaging... it supports eco-farming of its beans... and of course, like NMR, it's part of the Dow Jones Sustainability Index.

Action: Buy Starbucks (SBUX) at $26.98 or better, and place a 25% trailing stop under this position. That means we'll drop it from the portfolio if it closes below $20.24.

James

NMR - The Green Investment Bank Stages Rally!

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Our one laggard, Nomura Holdings, is showing signs of life amid a tumultuous week for the stock markets (see above)...

Over the past two days, NMR has rallied some 5.31% from $17.50 to $18.43. But I think we're in the beginning stages of a longer-term surge in this quality Japanese bank.

Profits for the most recent quarter tripled, from 20 billion yen to 76 billion yen, year over year. In addition, the bank's considering leaving the U.S. mortgage market altogether, after suffering heavy losses in that part of its business.

Instead, NMR plans to refocus on its core business of assets management, alternative assets and the Japanese mortgage market, which is poised to surge after a 20-year down cycle.

Let's keep a close eye on this one...

Good investing,

James

Markets Get Hammered - Hail Diversity

The markets are getting slaughtered today. As I write, the Dow is down more than 334 points on the day... The Nasdaq and S&P are down by the same percentages (2% roughly).

This is the kind of rough sledding that skittish investors dread, and experienced investors simply prepare for...

Witness our holdings in Bunge - a straight up commodity play that often zigs when the broad markets zag.

Today Bunge is UP 5.14%... and NMR is also rallying, up more than 2% amid this bloodbath.

Our portfolio is so far weathering this lightning storm pretty well... we've only lost about 1.08% while the Dow is off 2.44%... Again, there's always luck involved when this happens...

But is it just luck? Of course not. Diversification into commodities and commodity stocks is part of the plan. It's a hedge against broad stock declines, but it's also a great long-term bull play on the worldwide shortage in so many commodities.

Recall from my last post that I was looking to add another commodity-green play next... can you see the logic now? I do believe that the rest of the summer could get even uglier (as predicted in the spring on this blog).

But no need to panic... Let's just keep our course for now, mind our trailing stops and keep going.

Until then we're STILL long green,

James

Green Investments Beating the S&P by 231% - with an 80% Win Rate

Well, it's been awhile since I've updated this blog... There's been a lot going on in the markets - the Dow hitting record highs, etc. - but nothing that's made me want to jump into the markets with a new pick recently.

So let's take a quick look at where we are now - with our current portfolio - and then consider what our next move might be.

Currently, 4 out of 5 positions are profitable, despite the recent roller-coaster ride in the stock markets. Here's the overall picture right now:

BG +19.83%
LDK +70.15%
KB +25.16%
KEP +13.46%
NMR (-13.11%)
PORTFOLIO GAINS TOTAL: 23.64%

We certainly nailed the LDK Solar bottom - a true investing rarity but we'll take it.

Here's what we said:

"This is a trend play all the way, and we're hoping for some fast, dramatic gains in the face of rising oil prices, demand for green stocks and alt energy plays, and LDK's positioning as only one of two current Chinese solar plays trading in the U.S. (with a third on the way)."

The position is up 70% over the past month and a half. Meanwhile the Chinese solar play we rejected in favor of LDK is up 3% over the same time frame (CSUN).

NMR is our one laggard, but it's well above our trailing stop of 25%... Meanwhile, we're indeed beating the S&P by a broad margin: 23.64% versus 7.13% as of closing July 25th.

Indeed, we have managed through fortune and good timing to beat the S&P by 231% so far this year (not including our big options winners) - and it's been a record year for the S&P, too.

Yet in the process we are investing in a clear-air company... a Chinese solar company... two green-oriented Asian banks... the biggest wind-power contractor in mainland China... and perhaps the most important American player in the burgeoning market for ethanol and agri-fuels, Bunge.

Our next round of picks I'm thinking could come from the commodity sector. I've been looking to add another green commodity play to our portfolio to go along with Bunge.

I'll keep you posted.

James

Adding LDK to the Portfolio - A Solar Play on China

Well, it's been awhile since there has been any reason to update our positions... We're still up on all our remaining positions after taking the big loss in SLUP, which has only nosedived further, confirming our decision to cut our losses when we did.

We're adding a new stock to our portfolio today: LDK Solar (LDK).

LDK IPO'd last week, peaked over 30, and retreated just as quickly... The chart shows that the stock MAY have found some support, but it's so early that it's impossible to tell for sure.

This is a speculation, but a good one. LDK is engaged in the manufacture of high-technology solar-cell wafers, has a market cap of $400 million-plus and trades on the NYSE. This is a trend play all the way, and we're hoping for some fast, dramatic gains in the face of rising oil prices, demand for green stocks and alt energy plays, and LDK's positioning as only one of two current Chinese solar plays trading in the U.S. (with a third on the way).

As you can see from the chart above, LDK could be hitting some support.

Let's move now, and try to catch sunshine in a bottle.

ACTION: Buy LDK Solartech (NYSE: LDK) at $27.20. Place a 25% trailing stop on this position.

Good investing,

James

Update and New Green Investments Coming Shortly

We'll have a new pick and an update coming along shortly... Meanwhile, all our positions are holding well...

More to come...

James

Sell Solucorp Now

Sell Solucorp.

It's unfortunate, but we must exit this position at at 63% loss. Here's why...

We knew we would be in for a bumpy ride with SLUP, but we couldn't have anticipated how long it would take for the accounting to come out on its past performance numbers... When the audited 2005 report came available not long ago, the company posted a $14.7 million loss for the year.

And 2006 has not become available yet, but it is becoming clear that this speculation has flopped. Best to cut our losses now rather than wait for this penny stock to become a half-penny stock, which seems to be where SLUP is headed.

We didn't use a trailing stop on this position because of the volatility in the shares and our initial belief in long-term prospects for the firm's dry scrubbing technology (designed to lower coal-fired plant pollution).

Call it: SLUP, dead at 2:29 p.m. EST, April 12, 2007.

James