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 geokills
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Registered: 05/08/01
Posts: 13,450
Loc: city of angels
Last seen: 15 hours, 33 minutes
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 Stock Update for May 13, 2008 - CPL [Re: geokills]
#8397025 - 05/13/08 02:33 PM (6 months, 19 days ago) |
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- CPFL Energia (CPL) - Currently Trading at $70.58 / share
This is the high dividend yielding Brazilian electric energy producer/distributor that I initiated a position in last week. Their quartly results came out today and seem rather lackluster. Being an electric utility, I know this is going to be a boring company, and even though the quarter was unimpressive, I am going to hold the small position I have. The company had a lot of non-recurring events to account for in the current quarter which negatively impacted their earnings. Reported EBITAD (earnings before interest, taxes, amortization, and depreciation) were down 25.7% from the year ago period. Excluding the non-recurring events, EBITAD was actually up 5%. Revenue was up 17.2%, and Net Income was up 4.5% excluding non-recurring events. These non-recurring events were primarily energy tarriff costs of 165 million, which were expected and provisioned for, but there was also a delay with a new power facility which cost 19 million. Gross revenue from energy sales increased 11.9%, while net revenue increased 17.2%, however energy costs excluding non-recurring events were up 16.1% and operating costs up 11.8%. The company took on added debt in 2007 to finance an acquisition, and its debt management has been stable since then with a debt to total capital ratio of 55.14%, which is in-line with the electric utilities industey's norm - in other words, CPFL should have little trouble repaying debt. There are two new power plants coming online this year, but that should already be baked into the stock. A very large plant is expected to come on in 2010, which should act as a catalyst next year. All things considered the stock didn't react very much to today's report (down 2%), but due to the unimpressive reported numbers I am going to sit tight for a while instead of picking up more shares, as I feel there may be some more weakness over the coming quarters as there will be few catalysts to propel the stock higher in the short term. Barring any unforeseen setbacks, I am OK with this, as the stock's 7%+ dividend yield is a fantastic incentive to stick around and wait for the company to continue executing its growth strategy. With that in mind, should the stock's share price fall into the mid $60's, I will likely pick up additional shares.
Discretionary Portfolio as of 5/13/2007:- 19.6% Cash
- 7% Philip Morris (PM)
- 6.4% Yamana Gold (AUY)
- 6.3% Schering-Plough (SGP)
- 6.1% Proctor & Gamble (PG)
- 6% Deere (DE)
- 5.9% Transocean (RIG)
- 5.7% Sirius Satellite (SIRI)
- 5.7% Jones Apparel (JNY)
- 5.5% Apple (AAPL)
- 5.3% McDonalds (MCD)
- 5% Altria (MO)
- 4.7% UltraShort S&P500 ProShares (SDS)
- 4.2% Hudson City Bank (HCBK)
- 4.1% Petrobras (PBR)
- 2.3% CPFL Energia (CPL)
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┼ ··∙ long live the shroomery ∙·· ┼
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geokills
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Registered: 05/08/01
Posts: 13,450
Loc: city of angels
Last seen: 15 hours, 33 minutes
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Stock Update for May 14, 2008 - DE, SDS, Oil & Gas, & Infrastructure [Re: geokills]
#8401292 - 05/14/08 03:04 PM (6 months, 18 days ago) |
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- John Deere & Co (DE) - Currently trading at $81.25 / share
Deere reported a so-so quarter today and shares dropped a whopping 10%! Earnings of $1.75 per share fell only one cent shy of analyst expectations and sales revenue was also slightly lower than expected ($7.47 billion versus the $7.61 billion consensus estimate). On the flip side, sales were up 19% and management raised growth guidance for the rest of the year, noting equipment sales should grow 20% this year on production growth of 17% versus previous expectations of 17% equipment sales growth on 15% production growth. Profit guidance was unchanged, and soaring material costs (from steel prices to fuel for transportation) are eating into profit margins and thereby balancing out the better than expected growth. Management took the conservative route (which is good) by doubling their suggestion for a cost increase of $400 - 500 million this year, mostly to come in the third quarter. Since Deere has a backlog of committed orders, they lack the flexible pricing power to raise rates immediately, which is why these added costs will pinch their margins during the second half of 2008. However, orders taken now for next year are being priced higher, and margins could improve greatly in 2009. So even if 2008 stays flat, the long-term outlook for Deere remains positive. The company reported for the first time that its agricultural equipment sales outside of North America are projected to be greater than those inside North America this year, making for more of a global story which is very positive. Sales outside of the US this quarter were up 46% and earnings up 22%. Though Deere's construction business is still being negatively affected by the housing slowdown and margins in the construction and forestry business as well as the agricultural-equipment business are under pressure, long term fundamentals remain intact and I will hold on to my position. After today's precipitous fall, I am 2.4% below my average cost basis; and if shares are to fall into the low $70's, I will likely be adding to this position.
- UltraShort S&P500 ProShares (SDS) - Currently trading at $56.13 / share
I was very close to scaling back this position towards the close of trading today when the bears began to knock down the market. With a tame report on consumer prices, a slide in oil, and mortgage lender Freddie Mac reporting a smaller-than-expected loss, the market looks like it may have a good chance to continue its recent rally. Even options expirations may play into a continued uptrend, and shorts may feel obligated to cover their positions due to the strength we've seen and the tame inflation data that the CPI data eluded to. Nevertheless, it's when things begin to seem too rosy that we ought to stay defensive. That is why, even though I am a bit torn, I am leaving this UltraShort on the table, in case the S&P does begin to rollover.
- Oil & Gas
Oil inventory data came out today, natural gas numbers come out tomorrow. This tends to put pressure on the oil and gas group, and therefore it's little surprise that oil futures pulled back today and my positions in Transocean (RIG) and Petrobras (PBR) are off about 1.5% as well. Should PBR see continued weakness through the end of the week, I may add to my position, even though shares are up a whopping 32.7% from where I initiated the position less than two months ago! Also extremely intriguing to me would be a new position in National Oilwell Varco (NOV), a provider of equipment and components used in oil and gas drilling and production, which was down 3% today and is well positioned to benefit from all these oil companies that are flush with cash and looking to upgrade or purchase new drilling equipment in order to meet the rising demand for oil and natural gas worldwide.
- Infrastructure & Materials
Infrastructure also appears ripe for the picking, and though I feel like a complete idiot for not having initiated that position in Jacobs Engineering (JEC) or Foster Wheeler (FWLT) when I saw them trading at $70 and $50 respectively at the end of March (now they're at $94 & $74 respectively), I still want to get involved in this sector because global growth is a trend that shouldn't be ending anytime soon. And though the major earthquake in China is socially disturbing, it should undoubtedly contribute to profits for infrastructure and materials companies. If you're looking for a pure materials stock to add to your portfolio, Freeport McMoran (FCX) would be great as they have exposure to copper, gold, and molybdenum, all metals which have been becoming increasingly more valuable. FCX can be a volatile stock, so scale in slowly and take advantages of dips if you do!
Discretionary Portfolio as of 5/14/2008:- 19.8% Cash
- 7% Philip Morris (PM)
- 6.6% Schering-Plough (SGP)
- 6.3% Yamana Gold (AUY)
- 6.1% Proctor & Gamble (PG)
- 5.9% Transocean (RIG)
- 5.8% Jones Apparel (JNY)
- 5.7% Sirius Satellite (SIRI)
- 5.5% Apple (AAPL)
- 5.5% Deere (DE)
- 5.3% McDonalds (MCD)
- 5.1% Altria (MO)
- 4.7% UltraShort S&P500 ProShares
- 4.2% Hudson City Bank (HCBK)
- 4.1% Petrobras (PBR)
- 2.4% CPFL Energia (CPL)
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┼ ··∙ long live the shroomery ∙·· ┼
...╬π╥ ╥π╬...
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geokills
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Registered: 05/08/01
Posts: 13,450
Loc: city of angels
Last seen: 15 hours, 33 minutes
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Stock Update for May 15, 2008 - CPL, Oil [Re: geokills]
#8406279 - 05/15/08 06:05 PM (6 months, 17 days ago) |
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- CPFL Energia (CPL) - Bought 15 shares at $71.50
I added a small stake to my already small existing position of CPFL earlier today, as shares were about 4% below my initial cost basis. Though I would have hoped for a greater pullback, the dividend support on this stock is strong and I felt like beefing up my position. Later in the day, I called Jim Cramer on his Mad Money television program and received confirmation that though there may be a few rocky quarters, the long-term thesis on growing Brazilian affluence will continue to spur energy demand, and that these odd quarters should be used as a buying opportunity. I noticed that after my call aired this afternoon and Jim gave me his blessing, shares of CPL were bid up by about $1 in after-hours trading! With nearly 7.5% annual yield, this position still has room to grow in my portfolio should there be any further weakness.
Here's a clip of my call which aired this afternoon on CNBC for anyone who's interested (I sure got a kick out of it!  ):
- Oil
Even though crude oil shed a few pennies today, I didn't get the break I was hoping for in order to add to my oil positions, with my Petrobras (PBR) stock up over 3%, and Transocean (RIG) up over 5% (even more after hours!). I will continue to look for an entry in National Oilwell Varco (NOV), as I firmly believe that rich oil companies will have no choice but to continue upgrading and buying new drilling equipment in order to satisfy global demand. This is especially true after a report came out today that noted Petrobras is looking to buy up every deepwater drilling contract available past 2010 (likely to get at the HUGE find off the coast of Brazil that has been largely responsible for PBR's sharp rise since December). PBR's intentions are probably what sent my shares of Transocean (the best deepwater driller) up so sharply today. At these levels, with shares nearly 37% and 71% above my average cost basis respectively, I'd rather wait for a pullback to add to my positions.
Discretionary Portfolio as of 5/15/2008:- 18.1% Cash
- 7% Philip Morris (PM)
- 6.5% Yamana Gold (AUY)
- 6.4% Schering-Plough (SGP)
- 6.2% Transocean (RIG)
- 6.1% Proctor & Gamble (PG)
- 5.8% Jones Apparel (JNY)
- 5.6% Sirius Satellite Radio (SIRI)
- 5.5% Deere (DE)
- 5.5% Apple (AAPL)
- 5.3% McDonalds (MCD)
- 5.1% Altria (MO)
- 4.6% UltraShort S&P500 ProShares (SDS)
- 4.2% Hudson City Bank (HCBK)
- 4.1% Petrobras (PBR)
- 3.8% CPFL Energia (CPL)
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┼ ··∙ long live the shroomery ∙·· ┼
...╬π╥ ╥π╬...
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Terillius
Renaissance Man
Registered: 07/21/06
Posts: 606
Last seen: 12 days, 4 hours
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 Re: STOCKS - A Beginner's Guide & Running Record [Re: Terillius]
#8407427 - 05/15/08 10:19 PM (6 months, 17 days ago) |
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Quote:
Terillius said:
I just saw Sun (JAVA) drop 22% on news of surprise losses. I am thinking this is a short-term trader's dream. There is no way such a large and well known company will go under and there is always a recovery after these knee-jerk reactions. What do you think? Grab a bunch and bank on that 22% recovery?
I ended up jumping on this and I am up 6.5% in 10 days. I am quite proud of myself considering this is my first venture into the market. This sure beats my checking account's pennies per month yield. 
I think Sun will at least double it's recovery so far and I hope to see it reach $16 in the short term (currently $13.49).
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"The Prohibitionist must always be a person of no moral character;
for he cannot even conceive of the possibility of a man capable
of resisting temptation." -Aleister Crowley
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geokills
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Registered: 05/08/01
Posts: 13,450
Loc: city of angels
Last seen: 15 hours, 33 minutes
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Stock Update for May 16, 2008 - TEX [Re: geokills]
#8420625 - 05/19/08 03:59 PM (6 months, 13 days ago) |
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- Terex (TEX) - Bought 30 shares @ $73
On Friday, I initiated a position in this global manufacturer of construction, infrastructure, quarrying, surface mining, shipping, transportation, refining, and utility equipment because it is becoming plain to see that strong global development isn't going to dry up anytime soon. With countries like Brazil, Russia, India, China, Chile, and many others rapidly growing their infrastructure - in addition to the earthquake disaster in China which is estimated to have caused over $20 billion in damages - companies that build the heavy machinery and mechanisms necessary for these developmental, mining, and rebuilding projects will stand to benefit. Terex has managed to meet or exceed estimates for the last nine quarters and is trading at a discount to its peers with respect to its PE multiple as well as its Price to Earnings Growth (PEG) multiple. The company looks cheap, is still a hefty 23% off of its highs, and since 70% of its sales are international, I do not worry so much about it being adversely affected by a slowing US economy. There is one major drawback however, and that is the rising price of steel, a major input cost for its machinery production. Nevertheless, I believe growth will offset this drawback and then some, and plan to continue building this position on any pullback.
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┼ ··∙ long live the shroomery ∙·· ┼
...╬π╥ ╥π╬...
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geokills
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Registered: 05/08/01
Posts: 13,450
Loc: city of angels
Last seen: 15 hours, 33 minutes
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Stock Update for May 19, 2008 - JNY, SDS [Re: geokills]
#8420714 - 05/19/08 04:22 PM (6 months, 13 days ago) |
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- Jones Apparel (JNY) - Sold 100 shares @ $17.25
It's been three months since I initiated this position, and with my shares of JNY now over 12% above my average cost basis (and having risen some 38% in the last 5 weeks alone), I believe retail has been getting a little hot. Though the economic stimulus plan that is putting up to $600 in taxpayer's pockets will undoubtedly help retail in the near-term, I'm beginning to feel that this has already been priced into the stocks given their impressive rise over the last couple of months. Since this is a domestic retail play and consumers are getting squeezed with high gasoline and energy costs, I cannot pretend that there are no fundamental risks going forward. So having qualified for their quarterly dividend last week, and with the stock near its 5 month high, I sold 100 of my 250 shares today.
- UltraShort S&P500 ProShares (SDS) - Bought 22 shares @ $54
As the S&P continues to levitate higher (and this position keeps losing me money!  ), I know that ultimately there will come a pull back. In aggregate, for the long-term I definitively believe that the market will be going higher, but I also believe that along the way there will be dips. With the market up huge and having seen almost no weakness since April 15th, odds are good that there will be some profit taking ahead. While it may not be much (given how much stocks have fallen since October of '07), the market never goes up in a straight line. Conjoin this idea with the fact that I'll be out of town for six days starting Wednesday evening, and I wanted to increase my hedge against a potential fall in the market while I'm away.
- 15.9% Cash
- 7.1% Philip Morris (PM)
- 6.8% Yamana Gold (AUY)
- 6.4% Transocean (RIG)
- 6.3% Schering-Plough (SGP)
- 6.2% Proctor & Gamble (PG)
- 6.1% UltraShort S&P500 ProShares (SDS)
- 5.4% Sirius Satellite (SIRI)
- 5.4% Deere (DE)
- 5.3% Apple (AAPL)
- 5.2% McDonalds (MCD)
- 5.2% Altria (MO)
- 4.4% Petrobras (PBR)
- 4.1% Hudson City (HCBK)
- 3.8% CPFL Energia (CPL)
- 3.4% Jones Apparel (JNY)
- 3% Terex (TEX)
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┼ ··∙ long live the shroomery ∙·· ┼
...╬π╥ ╥π╬...
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geokills
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Registered: 05/08/01
Posts: 13,450
Loc: city of angels
Last seen: 15 hours, 33 minutes
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Stock Update for May 21, 2008 - JNY, NUE [Re: geokills]
#8428093 - 05/21/08 10:01 AM (6 months, 11 days ago) |
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Leaving on vacation today, tidying up the portfolio and maintaining a healthy short position on the market (SDS) in the face of parabolic moves in the oil and materials sectors, and the potential for a continued pullback as the market digests its solid upward trend from the last two months.
- Jones Apparel (JNY) - Closed position of 150 shares @ $16.20
As indicated in my last post, I don't think domestic US based retail has an easy path ahead of it. With Jones Apparel over 30% above its recent lows, and these shares still over 6% above my average cost basis, I am closing out my position by selling my final 150 shares of JNY. Would I have wished to have sold these shares at $17.25 along with the 100 I sold on Monday? Maybe so, but I've learned that more often than not, it pays to take measured steps and do both your buying and your selling incrementally over time. I might have held onto this position for a while longer to catch a bounce, were it not for the fact that I'm leaving on a one week vacation starting this evening. As I won't have as much time to keep up on the market, and with oil continuously breaking all-time records, I figured this an opportune moment to clean house and remove my portfolio of stocks that just don't seem to have a lot of near-term upside potential (and indeed inversely, the potential for continued weakness).
- Nucor (NUE) - Bought 30 shares at $77.07
This steel manufacturer has been meeting or exceeding its earnings expectations for over three years now. The steel industry has always been very cyclical, however with steel in high demand thanks to the rapidly growing cohort of nations outside of the US that I keep mentioning: Brazil, Russia, India, China, Chile, etc., steel producers now have pricing power. The market doesn't get flooded with imported steel, as growing international countries are sapping up all of the excess demand. In addition, Nucor has made some smart acquisitions (of a steel recycler amongst others) that should have a quick positive impact to the company's earnings. The company earlier this week issued a secondary offering (selling ~ 25 million new shares to raise capital), which is dilutive to the current share value and generally to be thought of as a negative, but I believe that the 8% pullback from its highs set just two days ago presents a viable buying opportunity, and that is why I am initiating this position today. To note, Nucor does not look cheap based on current estimates for the company, but I believe those estimates are too low. On top of already strong global demand for this product, take note of how much larger the devastation from the recent China quake is compared to the Katrina devastation in New Orleans. Katrina helped support the GDP of the US, and the China rebuild will be MUCH bigger (consider that they had to move 12 million people to a new city, which is 100 times the move of New Orleans!). As long as steel companies are able to put through price increases, which seems likely given the incredible global demand, forthcoming quarters will bring with them a lot of analyst upgrades - which is just what a stock needs to move higher. We may yet have more to fall in the near term as the market cools down, but I would look at further weakness as a gift to continue building this position. I purchased today at around $77 because this is on the 20 day moving average, which has held as support for the last four months. The 50 day moving average currently stands around $73.75, and may become the new support level since the stock is trading below $76 as we near the close of trading today. If that can't hold, I would look for strong support at $67.50, and be a definite buyer at that level.
Discretionary Portfolio as of 5/21/2008:- 16.1% Cash
- 7.4% Yamana Gold (AUY)
- 6.4% UltraShort S&P500 ProShares (SDS)
- 6.4% Schering-Plough (SGP)
- 6.2% Transocean (RIG)
- 6.1% Proctor & Gamble (PG)
- 5.4% Deere (DE)
- 5.3% Sirius Satellite (SIRI)
- 5.2% Apple (AAPL)
- 5.1% Altria (MO)
- 5.1% McDonalds (MCD)
- 4.6% Petrobras (PBR)
- 4.0% Hudson City Bank (HCBK)
- 3.7% CPFL Energia (CPL)
- 3.0% Nucor Steel (NUE)
- 2.9% Terex (TEX)
PS. I'm getting tired of waiting around for Sirius Satellite Radio (SIRI) to receive merger approval for XM Satellite Radio from the FCC. This position is dead money right now, and I may decide to sell it off in order to add to my positions in infrastructure/materials/energy should the market have a deep pull back.
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┼ ··∙ long live the shroomery ∙·· ┼
...╬π╥ ╥π╬...
Edited by geokills (05/21/08 01:40 PM)
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 Liquidkick
H2O
Registered: 05/03/02
Posts: 2,466
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Re: Stock Update for May 21, 2008 - JNY, NUE [Re: geokills]
#8429621 - 05/21/08 04:43 PM (6 months, 11 days ago) |
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The question is...are we going to see an energy bubble?
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geokills
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Registered: 05/08/01
Posts: 13,450
Loc: city of angels
Last seen: 15 hours, 33 minutes
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 Re: Stock Update for May 21, 2008 - JNY, NUE [Re: Liquidkick]
#8431376 - 05/22/08 12:49 AM (6 months, 11 days ago) |
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I doubt it, but anything is possible. Energy is in high demand and with more gadgets and gizmos using more electricity, and people around the world coming into more money and therefore buying more of these power hungry gizmos and gadgets, I think the long term uptrend in energy stocks is not going to be broken anytime soon. Even if it does turn into a bubble, there isn't much sense in fighting the overall market psychology. Run with it, maintain your discipline, book profits on the way up, stay diversified, and if and when a bubble bursts, you will have already booked impressive gains.
On that note, I am increasingly happy that I sold out of my domestic retail play, Jones Apparel while I was still in the green (at +12% and +6%, not including the dividends I was paid). I am almost tempted to short the group, as these exceptional gas and energy prices are almost certainly going to cause domestic retail to be weak in the coming quarters. Even some of the banks still deserve shorting, I was thinking about shorting Indymac (IMB) on Monday, and could have bagged a 10% gain on the trade but I just didn't have the balls to do it. If we get a bounce tomorrow, I may end up putting on that short afterall.
Fortunately, I did add to my Ultrashort S&P500 position on Monday, which has been functioning as an excellent hedge against the weakness over the past couple of days (and the weakness that I believe will still be with us until at least next Tuesday). Though the market was down heavy on Tuesday, my portfolio was in the green, and even during today's broad based selloff with the market down 1.8%, my portfolio was only down 0.8%. I must say I am proud of my timing and outperformance here, but I must take this as a note of caution - and not let my ego encourage reckless investing! With this outperformance, it may be wise to take some profits in the stronger names, like Brazil's oil exploration and production company Petrobras (PBR), which is now up over 50% from where I initiated a position only a few months prior. Then again, the fundamentals for PBR are really sweet, and it just became the third largest company in the world (behind Exxon and GE I believe) by surpassing Microsoft in market cap this week.
I'm on vacation at the moment, but if I find some spare time I may look into ETF's that short small cap's exclusively, as those should be weighted more towards financials and retail than the overall S&P500, and therefore these small cap short funds should produce greater returns that the plain ol' S&P500 short that I have on at the present moment, since it seems retail and financials are the current laggards.
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┼ ··∙ long live the shroomery ∙·· ┼
...╬π╥ ╥π╬...
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Liquidkick
H2O
Registered: 05/03/02
Posts: 2,466
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Re: Stock Update for May 21, 2008 - JNY, NUE [Re: geokills]
#8431434 - 05/22/08 01:02 AM (6 months, 11 days ago) |
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wow PBR, last i checked it took a hit, it must have recovered.
I was reading some article about them leasing a bunch of rigs for the future and beating the other big giants.
I don't play PBR anymore or any of the big stocks.
Switching my strategy to more penny stocks and crap companies that get manipulated. More pump and dumps. Going with the Tim Sykes strategy for now. My account is really fricking tiny!
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geokills
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Registered: 05/08/01
Posts: 13,450
Loc: city of angels
Last seen: 15 hours, 33 minutes
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Re: Stock Update for May 21, 2008 - JNY, NUE [Re: Liquidkick]
#8432182 - 05/22/08 08:52 AM (6 months, 10 days ago) |
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> I was reading some article about [Petrobras - PBR] leasing a bunch of rigs for the future
Yep, and that played wonderfully into my portfolio! It shows that Petrobras has confidence in its huge recent finds and its exploration ability, and is actively working to get at that deep sea oil off the coast of Brazil. Transocean (RIG), which I've owned fora long time now, caught a lot of upside off of this news as the dominant deep-water driller, from which PBR is locking up contracts way past 2012, giving RIG even greater earnings visibility into the future and making the supply/demand for deepwater rigs even tighter. You may have read in a recent post above that I wanted to initiate a position in National Oilwell Varco (NOV) about two weeks ago, but it's up 10% in that time (and some 22% since the beginning of May!). I want to wait for a pullback before putting more money to work in the oil patch, because at $135 a barrel, crude looks a little over-extended over such a short period of time. While I do believe we could see $150 a barrel oil by year end, things just don't go up in a straight line.
I'm not familiar with Tim Sykes, and I don't think I'm seasoned to handle the huge volatility of the uber small cap's / penny stocks, but if you have a good strategy, those penny stocks sure can produce incredible gains over short time frames. I'd love to hear about some of your investments if you don't mind sharing.
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┼ ··∙ long live the shroomery ∙·· ┼
...╬π╥ ╥π╬...
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Liquidkick
H2O
Registered: 05/03/02
Posts: 2,466
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Re: Stock Update for May 21, 2008 - JNY, NUE [Re: geokills]
#8434482 - 05/22/08 08:27 PM (6 months, 10 days ago) |
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Well basically, short the living shit out of these crap pump and dump stocks.
Some dude on Tim's Sykes made ~32k today shorting MXC, PDO, FPP.
Basis is they are crap companies and they run up and they must come down. Yeah its all short term trading, check out his site... timothysykes.com
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geokills
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Registered: 05/08/01
Posts: 13,450
Loc: city of angels
Last seen: 15 hours, 33 minutes
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Stock Update for May 23, 2008 - PBR, AAPL, CPL [Re: geokills]
#8436356 - 05/23/08 10:11 AM (6 months, 9 days ago) |
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I'll check that out when I get a few more free moments, but for now, it's time for me to protect my capital by booking some profits and adding to a safe high-yield Brazilian utility play. I read some commentary by the Rev. Shark of TheStreet.com's Real Money service, that really makes a lot of sense to me:Quote:
It is possible the market may find its footing and resume its uptrend, but aggressive
defense at this point in time will not foreclose you from changing back to a more bullish
posture. It is always far more important that you protect gains and capital in a struggling
market than it is that you be positioned for potential profits.
The easiest thing to do in a market that is starting to act poorly is nothing. It is inaction
due to vague hopes that causes us to sit and do little while our positions start to break down.
I have fallen prey to being too passive in the past, and one of the reasons for this journal is to help me recognize when I'm making mistakes. With the market having had a significant rally off of its March lows, I need to book some of the impressive profits I've attained - though by no means will I be taking all of my positions off of the table.
- Petrobras (PBR) - Sold 20 shares @ $71.30 / share
Though I still firmly believe in the long-term fundamentals of this business going forward, I cannot deny that the stock has been extremely impressive, giving me solid gains over the period of only a couple of months. As a result of this rapid rise in both the share price as well as the rapid rise in crude oil (which will likely lead to a short-term pull back that has the potential to pull down stocks in the sector), I am selling just less than half of my position, for a 43% gain over my average cost basis. I am leaving 26 shares on the books in case there will be another leg up, and should there be a significant pullback in this name, I will not hesitate to rebuild the position.
- Apple Computer (AAPL) - Sold 7 shares @ $181.08 / share
This has been a long-term holding for me, but remembering its rapid decline in January of this year when the stock fell from over $200 a share to $125 a share, I want to protect my hard fought profits while I have 'em. Shares are up today some 2%, on the heels of analyst upgrades and Goldman Sach's adding Apple to its "conviction buy list". As this is trading largely on hype for the new version of the iPhone, it is already highly valued and with analysts already issuing their upgrades, it may not have much more to climb until it can prove that it is meeting or exceeding its sales projections for the iPhone and Macintosh computers. I still like the stock, but with shares 112% above my average cost basis, it is time to book some of these profits and hope for a pullback in order to buy more. I am still holding 15 shares.
- CPFL Energia (CPL) - Bought 17 shares @ $69.50 / share
This Brazilian electric utility has pulled nearly 5% below my initial cost basis, and I am now going to add a small chunk to my position. Why buy in the face of a potential down trend in the market? Because this stock is now yielding 7.5% in annual dividend payments, and since I believe Brazilian affluence will continue to support this company's growth, I like the idea of being paid 7.5% annually to wait around for this stock to appreciate over time. In a tough market, it is always wise to focus on high yielding dividend stocks, as these dividends will help support them by cushioning any weakness, because as the stock's share price declines, the dividend yield increases, thereby making it more attractive to new investors.
- 18.2% Cash
- 7.3% Yamana Gold (AUY)
- 6.9% Philip Morris (PM)
- 6.7% UltraShort S&P500 ProShares (SDS)
- 6.4% Schering-Plough (SGP)
- 6.2% Proctor & Gamble (PG)
- 6.1% Transocean (RIG)
- 5.4% Deere & Co (DE)
- 5.3% CPFL Energia (CPL)
- 5.3% Sirius Satellite (SIRI)
- 5.2% Altria (MO)
- 5.1% McDonalds (MCD)
- 4.1% Hudson City Bank (HCBK)
- 3.6% Apple (AAPL)
- 2.9% Nucor (NUE)
- 2.8% Terex (TEX)
- 2.5% Petrobras (PBR)
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┼ ··∙ long live the shroomery ∙·· ┼
...╬π╥ ╥π╬...
Edited by geokills (05/24/08 01:46 PM)
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Terillius
Renaissance Man
Registered: 07/21/06
Posts: 606
Last seen: 12 days, 4 hours
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Re: Stock Update for May 23, 2008 - PBR, AAPL, CPL [Re: geokills]
#8451719 - 05/27/08 06:35 PM (6 months, 5 days ago) |
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Why did gold and silver drop today (Tuesday 27th)? My jaw dropped and I can't find any explanations. Why does a gold company's stock drop with those prices (AUY)? It seems to me that a company with all kinds of assets besides the product it produces should be less volatile than the day to day price of its product...
Also, what news sources should I be watching to answer questions like this for myself? I get the feeling I missed some kind of big news...
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"The Prohibitionist must always be a person of no moral character;
for he cannot even conceive of the possibility of a man capable
of resisting temptation." -Aleister Crowley
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geokills
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Registered: 05/08/01
Posts: 13,450
Loc: city of angels
Last seen: 15 hours, 33 minutes
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Commentary on the May 27th drop in Gold (AUY), and oil's parabolic extension. [Re: Terillius]
#8455104 - 05/28/08 11:49 AM (6 months, 4 days ago) |
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A quick down 'n dirty general lesson: the market is rarely a rational entity and can trade largely on emotion. One can get a feel for the irrational nature of the markets over time, but one will never be able to time it correctly all of the time. If you invest in the stock market, you can expect to find yourself on the losing side of a trade from time to time. Nevertheless, there is usually something that the larger money managers are grasping onto that either emotionally or fundamentally drives their moves - whether or not these reasons are justified, is up to interpretation.
When you consider the action on Tuesday, there is foundation for the pullback in gold. That foundation lies on the fact that the price of gold tends to move in the same direction as that of oil, but in the opposite direction to the value of the dollar. On Tuesday, the dollar began to see some strength and oil began to pull back from its incredible spike upward. This in turn caused some investors in gold stocks to jump ship and book the handsome gains seen over the last few weeks in the gold mining stocks. We must remember that stocks rarely go up in a straight line. Yamana Gold was trading around $12.50 at the end of April, and had gained some 30% by the time the 21st of May rolled around. Naturally, a 30% move in less than a month will take some time to digest; and the dollar strength and oil pullback on Tuesday gave investors a solid reason to book profits after the ginormous run Yamana had had over the past few weeks. Even so, with the general uncertainty in the markets, I believe a position in gold is invaluable, and would use pullbacks like these as an opportunity to build a position. I would be buying right now, if Yamana Gold were not above my average cost basis and were it not already my largest stake, comprising 7% of my portfolio.
A quick note, I sold roughly half of my UltraShort position on the S&P500 (SDS) on Monday, as the nearly 4% slide in the markets during the past week could lead to a slightly oversold bounce (which we are seeing). Nevertheless, the market fundamentals are not rosey, and on any continued strength I will add back to my position in the SDS. As noted in a previous update, I booked a 43% gain in Petrobras (PBR), and will likely sell off my remaining stake in the name if it sees continued strength. Oil has gone up too hard too fast, and it is important to protect the profits I've achieved in this tough market. I do however, aim to leave my full position of Transocean (RIG) on the table, as their backlog (future visibility) remains strong, which should help protect it from sharp declines should the price of crude oil falter further. My cash position is now almost 22%, not including the 3.1% stake remaining in the UltraShort S&P500 fund.
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┼ ··∙ long live the shroomery ∙·· ┼
...╬π╥ ╥π╬...
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Veritas
Registered: 04/15/05
Posts: 10,379
Loc: PNW
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Re: Commentary on the May 27th drop in Gold (AUY), and oil's parabolic extension. [Re: geokills]
#8455232 - 05/28/08 12:32 PM (6 months, 4 days ago) |
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Quote:
A quick down 'n dirty general lesson: the market is rarely a rational entity and will trade largely on emotion.
Almost as though it is driven by individual human behavior. 
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No man is free who is not master of himself.
~Epictetus.
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geokills
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Registered: 05/08/01
Posts: 13,450
Loc: city of angels
Last seen: 15 hours, 33 minutes
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Stock Update for May 29, 2008 - NUE, SIRI [Re: Veritas]
#8459812 - 05/29/08 02:08 PM (6 months, 3 days ago) |
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Hehe, true that. Sometimes I forget that even given the intricate systems we have created, we plain can't outsmart ourselves!
- Nucor (NUE) - Bought 20 shares @ $73.45 / share
Now that this steel company's secondary offering (issuance of new stock) is complete, and the share price went above the offer price of $74, buying the stock today below that offer seems like a great deal. Steel remains in high demand, and Nucor's recent acquisitions - including Metal Recycling Services - should protect it from skyrocketing scrap steel costs. The earnings estimates for Nucor have not received the upside adjustment that I believe is warranted given steel's strong demand and rising price. I will look to add to this position on any further weakness. At $70, this stock would be a gift!
- Sirius Satellite (SIRI) - Concerned
This position has languished for many moons now, and while I believe that FCC approval of the XMSR and SIRI merger would create an upside pop, I'm not nearly as excited about this holding as I once was. Not only does the FCC approval have the potential to bring with it unwanted controls and regulation upon the merged satellite radio companies, but it looks like satellite radio may be moving past its prime altogether. Subscriptions while OK haven't been fantastic, and there are new technologies on the horizon which could take a huge chunk of share from satellite radio operators, and may even render them obsolete. The concern here is wireless broadband radio technology, which would offer a convenient and potentially limitless selection of radio for listeners. With this in mind, and my patience running thin, I will look to begin selling this position in the near future - preferably into strength. Take for example, the following piece from Kurt Hanson's blog:
Quote:
Honolulu's Brock Whaley: "I have heard the future in my car"
May 22, 10:59 AM
Posted by: Kurt Hanson
Honolulu radio programmer Brock Whaley (via RAIN reader and Madison AAA programmer Tom Teuber) reports:
I have heard the future in my car.
I have had a very exciting weekend so far. My curiosity got the best of me. The result was beyond
my wildest dreams. I have experienced the future of radio and even of DXing. It’s like I’m living
with the Jetsons.
I’m sure you heard about the huge Clearwire WiMax deal that went down this week. Let me review,
and get the business part out of the way. Clearwire is to be merged with Sprint Nextel’s wireless
broadband unit Xohm, combining Sprint’s 4G WiMax network (Xohm) with Clearwire’s existing Pre-
WiMax broadband network. Sprint will own 51% of the firm, with ex-Clearwire shareholders owning
27% — a consortium of Comcast, Time Warner, Intel, Google, and Bright House will invest $3.2
billion and own the balance. The new firm will retain the “Clearwire” brand and will sell 4G WiMax
mobile broadband to Sprint as an MVNO, while Clearwire & the cable companies will buy 3G mobile
broadband from Sprint as MVNOs.
Big players. With big e | |
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