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geokills
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Re: Stock Update for June 11th & 12th, 2008 - TEX, PM, DE [Re: AroundtheSon]
#8518943 - 06/13/08 09:27 AM (15 years, 7 months ago) |
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AroundtheSon said: Who do you trade with, and how much does it cost?
I use TD Ameritrade. $10 comission per trade, not the cheapest out there, but I am familiar with their trading platform and I don't mind the comission since it is never more than 1% of the value of my trades. For lower comissions, try InteractiveBrokers.
And Ferris, I agree with AroundtheSon, Tempurpedic is not well positioned for this environment. With the consumer tightening their wallets on account of rapidly rising food and energy (especially gasoline) costs, it seems unlikely that Tempurpedic will be able to show any upside surprise. Tempurpedic missed their Q1 2008 numbers by 5% (reporting 18 cents of earnings versus 19 cents estimate). You also have to consider that even though they missed by only one penny, that 19 cent estimate is down HUGE from last year, making it even less impressive. For example, Q1 '08 at 18 cents, was a 48.6% drop in earnings from Q1 '07. This exhibits rapidly decelerating earnings, and while with a long enough time horizon you may be alright, I wouldn't expect this stock to perform well for quite a while. On a valuation basis, the stock does look cheap historically, but when you factor in the current fundamentals, I just wouldn't touch it given the incredibly weak macro-economic environment for consumer discretionary goods.
That said, I bought a Tempurpedic Rhapsody pillow a few months ago and I absolutely love it!  But there's no way I'm buying one of their beds anytime soon... 
There are many alternative matresses available for considerably less money. Even Sealy is really starting to push their Spring Free latex beds, so what once was a niche market for Tempurpedic, is now opening up to more competition. Is the Tempurpedic bed that much better that it commands a premium along the order of 50 - 400% compared to its competitors? I'm not so sure...
PS. Remember Ferris, you didn't make 5% on your investment if you didn't sell any of your shares earlier this morning. Until you sell, you can just as quickly lose whatever gains you've seen on paper, and there is no guarantees a stock will return to those levels in the future.
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Ferris
PsychedelicJourneyman



Registered: 03/12/06
Posts: 11,529
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Re: Stock Update for June 11th & 12th, 2008 - TEX, PM, DE [Re: geokills]
#8520135 - 06/13/08 02:52 PM (15 years, 7 months ago) |
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I know it's probably not the most technically smart trade to make, but it was up up to 7.5% again today. It's a good example on trading on the rumor, as long as you sell your ill-begotten gains and run. Also, yes, I sold at the peak, I was watching real time data all day when I was supposed to be working . I set the target price around 9.45 both days and got some partial order completions, so in actuality, I got a little less than 4.5% return each day.
I'll try to keep rumor-mongering out of this thread, I just couldn't help but share this one.
-------------------- Discuss Politics
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geokills
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Stock Update for June 13, 2008 - SIRI, HCBK [Re: Ferris]
#8520435 - 06/13/08 04:12 PM (15 years, 7 months ago) |
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Nice job. 
Doesn't really matter how you make the money, so long as you're making it. I've never been much of a fast acting day trader, typically aiming for a longer term time horizon. I just don't have the balls for those quick swings, though if you do it right (as it seems you did today), it sure can be profitable!
So far as my books are concerned, I was getting a little overwhelmed with the sheer number of positions I have been compiling, and decided to trim down the portfolio to make things simpler for myself, and to help replenish my cash reserves for this very tough and erratic market.
- Sirius Satellite (SIRI) - Closed Position
Sirius saw some strength today, and even though the shares are over 10% below my average cost basis, I only had a small chunk left and I'm sick and tired of worrying about it. Did I let my emotion sabotage my trading strategy here? Given the continued strength of the shares into the close, I have to wonder if I may have... but all in all, I can take solice in not having to see that damn ticker on my screen anymore! I'm also happy to be rebuilding my cash position, as my four largest positions are all under water (i.e. below my cost basis) and I may want to continue to add to them if I see a short-term trading opportunity manifest in the beaten down names.
- Hudson City Bank (HCBK) - Closed Position
This name has been on a downward trajectory for over a month now. I had sold some of my stake in this name much higher, but since my cash reserves were getting a little thin with my recent purchases in Terex (TEX), Deere (DE), Yamana Gold (AUY), and CPFL Energia (CPL), I decided to sell the remaining position here, booking a 7% gain. Hudson City is still a very strong regional bank, with a good balance sheet and a safe book of loans (something very rare for a bank these days). But with all the overall pressure in the financials, I decided I had better protect these gains while I have them, as I've watched much more significant gains evaporate in the past, and I'm not ready to let that happen again. If HCBK can find its way back down below $16 a share, or the overall financial sector sees fundamental improvement, I may re-initiate this position... but for now, I am comfortable with my only financial exposure being in Goldman Sachs (GS), which was up over $11 a share today (+6.9%).
Discretionary Portfolio as of 6/13/2008:- 18.1% Cash
- 7.3% Terex (TEX)
- 6.8% Deere (DE)
- 6.6% Yamana Gold (AUY)
- 6.4% CPFL Energia (CPL)
- 6.4% Proctor & Gamble (PG)
- 6.0% Transocean (RIG)
- 5.4% McDonalds (MCD)
- 5.3% Philip Morris (PM)
- 5.3% Schering-Plough (SGP)
- 5.3% Nucor Steel (NUE)
- 5.0% Altria (MO)
- 4.2% Black & Decker (BDK)
- 3.6% Apple (AAPL)
- 2.9% Goldman Sachs (GS)
- 2.9% National Oilwell Varco (NOV)
- 2.4% Petrobras (PBR)
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AroundtheSon
Learning to See



Registered: 01/11/07
Posts: 4,427
Loc: Midwest.
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Re: Stock Update for June 11th & 12th, 2008 - TEX, PM, DE [Re: geokills]
#8527543 - 06/15/08 05:43 PM (15 years, 7 months ago) |
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I'm scared of putting money into gold; any companies well known for silver or other precious metals?
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geokills
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Stock Update for June 16, 2008 - SIRI, PBR, RTN [Re: AroundtheSon]
#8531366 - 06/16/08 08:13 PM (15 years, 7 months ago) |
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I'm scared of putting money into gold; any companies well known for silver or other precious metals?
I haven't followed any individual silver stocks, but you might consider the iShares Silver Trust Exchange Traded Fund (SLV), if you want to bet that silver has no where to go but up. Freeport-McMoran (FCX) is a great company with lots of exposure to copper, gold, & molybdenum. They were smart to acquire Phelps Dodge (a copper producer) a couple of years ago, now copper is taking off and it doesn't look like it will be stopping anytime soon as developing nations need this metal for their infrastructure build up.
On that note, let me just exclaim my gratitude for a day that has the market flat to down, but my portfolio handily in the green. 
- Sirius Satellite (SIRI) - Special Comment
Just wanted to whip myself a bit for closing my position in Sirius while the stock was still weak. I should have known better. I still had some cash on the side, I wasn't running on empty, and yet I still liquidated the position near its 52-week low. The timing was piss poor, as the FCC chairman came out today and voted his confidence in the XM/Sirius merger. There are still some other FCC decision-makers that need to bless the deal for it to go through, but the news today was positive for the stock, which traded up over 3% (and up to and over 5% at some points throughout the day). If the FCC allows the merger without severe restrictions, Sirius will stand to see another pop, and over the following 1 - 3 years, could appreciate rapidly so long as other technology (eg. WiMax - large scale wireless broadband distribution) doesn't grow too rapidly and overtake the market. With the merged company having a greater ability to negotiate contracts with automobile manufacturers to put its equipment in new vehicles, the combined company could do very well over the next 1 - 3 year period. Still, I'm a little burnt on the name, and I can breath a little easier not having to worry about this position any longer. I just wish I would have sold into strength!
- Petrobras (PBR) - Bought 20 shares @ $68.50
As you may remember, I sold these 20 shares for a 40-some % gain not long ago. Now that the stock has pulled back 5%, I'm going to repurchase the shares. I believe this Brazilian oil company has a bright future ahead of it; With active exploration and large deep-sea finds, this company should continue to experience rapid growth. I wouldn't rush to push heaps of cash into the oil space right now, as the commodity itself has had a tremendous run over the last year and could stand to cool off a bit before it resumes its upward trajectory. Nevertheless, there is no question that oil and energy in general are hot sectors with good fundamentals, and I have been feeling like my portfolio has been a little too light on oil exposure.
- Raytheon (RTN) - Initiated a position of 50 shares @ $57.65
Raytheon is a leading missile and military electronics manufacturer, down due largely to sector pressure. With election-related uncertainty, defense stocks have been rather lackluster. Also, another defense company, Textron (TXT), recently lowered its second-quarter earnings guidance. This shouldn't matter to RTN, as the lowered guidance is a result of TXT's finance division, not the overall defense business. No politician can afford to look soft on defense, so companies like Raytheon should not be at any serious risk of losing funding in the future. This is a solid, stable company with good earnings, international exposure, one of the top growth rates in the industry, and trading at the low end of its historical price-to-earnings (PE) range. It may not be off to the races, but on valuation it looks cheap to me, and I'm willing to camp out here while other sectors get swung around in this choppy sea of a market.
- 12.2% Cash
- 7.3% Terex (TEX)
- 7.0% Deere (DE)
- 6.5% Yamana Gold (AUY)
- 6.5% CPFL Energia (CPL)
- 6.4% Proctor & Gamble (PG)
- 6.0% Transocean (RIG)
- 5.4% McDonalds (MCD)
- 5.4% Nucor Steel (NUE)
- 5.3% Schering-Plough (SGP)
- 5.2% Philip Morris (PM)
- 4.9% Altria (MO)
- 4.3% Petrobras (PBR)
- 4.1% Black & Decker (BDK)
- 4.0% Raytheon (RTN)
- 3.6% Apple (AAPL)
- 3.0% Goldman Sachs (GS)
- 2.9% National Oilwell Varco (NOV)
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geokills
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Stock Update for June 18, 2008 - PM, MO, WMT, SWN [Re: geokills]
#8538408 - 06/18/08 08:16 PM (15 years, 7 months ago) |
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Doin' a little maneuvering today. Hopefully for the better! 
- Philip Morris (PM) - Closed Position @ $50.30
Altria (MO) - Bought 50 shares @ $20.70
I've sold my remaining shares in Philip Morris, the international division that was spun off of Altria earlier this year. I used some of the cash from that sale to buy an additional 50 shares in the domestic division, Altria (MO). This will not only help to simplify my portfolio (not having to track two different tobacco stocks), but it also seems that Altria is the safer bet at the moment. While PM does compete in emerging markets and therefore has better growth prospects, MO sports a better than 5% annual dividend yield, has been able to raise prices, and owns a 28% stake in SABMiller (the alcohol company). Since Anheuser-Busch (BUD) just received a hefty takeover bid from Belgian brewer InBev, it seems increasingly likely that Altria will be able to monetize its stake in SABMiller. And even if it doesn't, the company's strong cash flow should support a stock buyback and possible dividend increases while we wait.
- Wal-Mart (WMT) - Initiated Position of 40 shares @ $58.50
Though this stock has already had a nice run, it seems likely that consumer sentiment is going to stay fairly weak over the intermediate term (next year or so). When people's homes are losing value, fuel and energy costs are high, employment is going down... people get thrifty. Shoppers will begin to frequent stores like CostCo (COST), Ross (ROST), Big Lots (BIG), and you guessed it, Wal-Mart. With Wal-Mart able to deliver savings on a large scale, its 40% exposure to food/consumables, and having recently improved stores to make the shopping experience a little nicer for the customer, it should be the "go to" name for anyone who wants to save some cash at the store OR invest in a retail stock. Diversified fund managers will be required to put money in some sort of retail stock (even though most of them suck), so my money is that they'll be putting it in Wal-Mart. I will too.
- Southwestern Energy (SWN) - Initiated Position of 50 shares @ $45.75
This is an independent energy company involved with natural gas exploration and production in the United States. They have a big stake in the Fayetteville Shale region of Arkansas (XTO has also been buying acreage there), which is one of the main drivers behind their growth. The management has executed its strategy well, and with natural gas commanding high prices alongside a hopeful political incentive to start using more domestic natural gas and less foreign oil over the next several years, I like this li'l hot stock. SWN trades with a high PE multiple, but they are going to see 35% production growth this year, alongside some of the lowest exploration & development costs in the industry. While I've had fairly good exposure to the oil patch through names such as Transocean (RIG), Petrobras (PBR), and most recently National Oilwell Varco (NOV); I have been meaning to find a good natural gas stock, and I believe this one will fit the bill.
Discretionary Portfolio as of 6/18/2008:- 9.6% Cash
- 7.2% Terex (TEX)
- 6.9% Yamana Gold (AUY)
- 6.8% Deere (DE)
- 6.4% Altria (MO)
- 6.4% CPFL Energia (CPL)
- 6.3% Proctor & Gamble (PG)
- 6.2% Transocean (RIG)
- 5.4% Schering-Plough (SGP)
- 5.3% Nucor Steel (NUE)
- 5.3% McDonalds (MCD)
- 4.4% Petrobras (PBR)
- 4.0% Black & Decker (BDK)
- 4.0% Raytheon (RTN)
- 3.7% Apple (AAPL)
- 3.2% Southwestern Energy (SWN)
- 3.2% Wal-Mart (WMT)
- 3.0% Goldman Sachs (GS)
- 2.9% National Oilwell Varco (NOV)
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geokills
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Stock Update for June 20, 2008 - TEX, BDK, PBR, NOV, SWN, RTN, WMT, MCD [Re: geokills]
#8544836 - 06/20/08 03:06 PM (15 years, 7 months ago) |
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Well, it's been another "the street is running red with blood" kind of week here in the stock market. Why I got so optimistic as to close my hedge / short position (SDS) a couple of weeks ago is now beyond me. I got cocky, and I'm paying for it. With the indicies so low now, retesting their January and March lows, I am hesitant to commit money to short positions at this point. But if we break through this resistance level, the next leg down could be an easy 8 - 10 %. Make no mistake, things are ugly out there and the trend is definitely to the downside. With this in mind, I have created a little post-it on my desk that constantly reminds me which of my holdings I want to sell into strength, and which I would like to buy more of on weakness. I will review this with you now:
- Sell on Strength
Terex (TEX) - 11% below my cost basis - 7.2% of my portfolio. While I strongly believe in the long-term story here, with this capital goods manufacturer of cranes and mining equipment sourcing 70% of its business internationally, the headwinds of a downtrending market alongside high raw costs (steel and oil), may not allow this name to recover as quickly as I had initially hoped. I will note that I would not even consider selling Terex, if it weren't for my sizable position in another capital goods manufacturer, John Deere (DE). I prefer Deere's agricultural sector tie-in, which is why I would rather focus my risk on that name. This is something I have been battling with, as I truly respect both companies and believe they will both perform well... but this position has grown way too large and I need to raise some cash, so I will look to cut back on my position in Terex when the shares see some strength. The stock is at $61.48 right now, and there should be some strong support at $60, so I believe we are in for a near-term bounce off of that level.
Black & Decker (BDK) - 6% below my cost basis - 4.1% of my portfolio. This early cycle play, while intriguing, I'm afraid I may not have the patience to wait around for. The company should turn around and power higher as soon as the economy begins to show signs of strength. But we have been prolonging the pain of this economic downturn by propping up failing banks with new investment capital through the federal reserve, secondary offerings and the sale of ownership interest. This has prevented banks from failing, but perhaps we should be letting these poorly managed financial firms go under, rather than giving them just enough money to stay afloat, until their balance sheet erodes once again and they need to do another round of capital raising. If these banks were allowed to fail, I think the healing process could move forward much faster and the economy could begin to look forward. Instead, we are dragging our feet and have little conviction in any direction. I could go on and on... suffice it to say that while B&D should do alright in the longterm, I would rather have the cash that is currently invested into this position, available on the sidelines to take advantage of market dips, and to put to work in sectors that are working now.
Petrobras (PBR) - 12.5% above my cost basis - 4.2% of my portfolio. Another one that's hard to let go, as they have found some serious oil reserves in and off the coast of South America. In time, they will be able to monetize these finds and become extremely profitable. As you know, I even bought additional shares in this name earlier this week! But for now, the stock has had a good run, I'm still well in the green, and I believe the smarter bet for the oil sector, is to focus on the companies that service and drill for industry at large. Hence my active positions in National Oilwell Varco (NOV) and Transocean (RIG).
- Buy on Weakness
National Oilwell Varco (NOV) - 2.4% above my cost basis - 3% of my portfolio. Recently initiated, and already showing some strength in a treacherous tape. For all of the many companies that are exploring and producing oil and gas, National Oilwell Varco will service. They provide the technology and maintenance required for drilling. Whether or not any specific oil company does well or not doesn't matter to NOV, because they service the whole industry. I believe this diversification in such a strong sector will pay off handily, as oil has come up enough in price to allow companies to drill profitably in increasingly difficult places (like the deep sea for example).
Southwestern Energy (SWN) - At my cost basis - 3.2% of my portfolio. Another recently initiated name, this one is an independent company that operates primarily within the United States, and is involved mainly with natural gas exploration and production. Natural gas prices have gone through the roof and this company is actively exploring and monetizing new finds, particularly in the Fayetteville Shale region, which is an unconventional gas reservoir located on the Arkansas side of the Arkoma basin. They are one of the fastest growers in the industry and the Fayetteville Shale region is one of the most promising and exciting places to be drilling for new reserves. Not to mention their drilling in the Permian Basin and the Marcellus Shale (two other great natural gas regions). So long as natural gas can stay above $8 per million btu, this company should do great. I have not previously had any direct exposure to natural gas, and as it is such a hot sector, I think it's high time I picked some up.
Raytheon (RTN) - At my cost basis - 4.1% of my portfolio. A defense contractor who builds all those missiles for our war machine. It's an unfortunate business but someone's got to do it, and these guys are one of the best at what they do. Though the thought of Obama in the white house has caused the defense sector to selloff a bit, I don't believe any politician can afford to look weak on defense, and therefore military spending should remain fairly constant for the foreseeable future. The stock is trading at historically cheap levels, and for a stable company that won't be as affected by a economic downturn, I would like to continue to build my position here.
Walmart (WMT) - 2% below my cost basis - 5.5% of my portfolio. I did just pick some of this up today on weakness, but I could stand to pick up another chunk if it were to fall back to $55. This company is the best positioned retailer for an economic downturn. They have 40% exposure to food, which is comforting since food will always stay in favor even as people may cut back on such things as apparel. They have revamped their stores to make them nicer, focused on inventory controls and improved their markdown strategy. They also reported excellent May sales numbers, but the stock has sold off heavily since then. People will be shopping here more and more, as they shy away from the more expensive markets such as Whole Foods.
Today's trades...
- Walmart (WMT) - Bought 30 shares @ $56.50
For the reasons stated above, this is the best retailer to own for the current economic climate. I was becoming guilty of ignoring the very real underlying risks to our economy, and have been overly aggressive in "recovery" names. Unfortunately, if the recovery is a long ways off, I'll just be sitting around bleeding money. Well, nuts to that, here's a purchase that correlates positively with the current market environment, and that's just fine with me. Don't forget the 1.7% dividend yield.
- McDonalds (MCD) - Bought 18 shares @ $57.50
This stock has done fairly well for me over the past year. I sold some higher in the $60's, and the time has come to start buying back shares. The company reported fantastic sales, taking market share internationally and indicating 4.3% growth in the US, which proves that their focus on high profit beverages and value oriented consumer offerings is working. Sales of their specialty coffee have been going well, and I believe that significant upside remains as they roll out this new product to all of their stores. The 2.6% dividend yield is just the icing on the cake.
Discretionary Portfolio as of 6/20/2008:- 5.9% Cash (dangerously low!)
- 7.2% Terex (TEX)
- 7.0% Yamana Gold (AUY)
- 6.8% Deere (DE)
- 6.7% McDonalds (MCD)
- 6.5% Altria (MO)
- 6.3% Transocean (RIG)
- 6.2% Proctor & Gamble (PG)
- 6.2% CPFL Energia (CPL)
- 5.5% Walmart (WMT)
- 5.3% Nucor Steel (NUE)
- 5.2% Schering-Plough (SGP)
- 4.2% Petrobras (PBR)
- 4.1% Black & Decker (BDK)
- 4.1% Raytheon (RTN)
- 3.7% Apple (AAPL)
- 3.2% Southwestern Energy (SWN)
- 3.1% Goldman Sachs (GS)
- 3.0% National Oilwell Varco (NOV)
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Terillius
Renaissance Man


Registered: 07/21/06
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Re: Stock Update for June 20, 2008 - TEX, BDK, PBR, NOV, SWN, RTN, WMT, MCD [Re: geokills]
#8545608 - 06/20/08 08:28 PM (15 years, 7 months ago) |
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I'm out. It's the savings account for me. I have a 30 stock or so watch list and when they are all in the red it tells me to run and hide. "People" are on the fear train now and there is no stopping it.
Why have energy costs risen so sharply all of a sudden? We use energy at a pretty steady rate... Why doesn't the government take over the whole shebang to protect the consumer? I want my garbage taken every week period and I don't want to have to worry about value shopping because there is no if-and-or-but about it, I must have garbage collection. It is the same with energy.
BTW, do you glance at sirius now and then? Ouch...
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geokills
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Re: Stock Update for June 20, 2008 - TEX, BDK, PBR, NOV, SWN, RTN, WMT, MCD [Re: Terillius]
#8545825 - 06/20/08 10:19 PM (15 years, 7 months ago) |
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> BTW, do you glance at sirius now and then? Ouch...
Yes... turns out I got out just in time! Sold my last 625 shares last Friday. Though I ended up with an 11% loss on the position, it was well worth it to avoid both the monetary and the psychological trauma the stock would have inflicted upon my portfolio over the last week, where it lost an astounding 26% since Monday's open. 
I am nearly fully invested right now, which admittedly has me on edge. On the calm of a Friday evening, I have realized that it's even a bit reckless and that I really need to clean up my portfolio. I feel most comfortable with 10 - 25% in cash, and with the market downtrending, I should maintain a much larger buffer than the 6% cash I'm currently holding. Unfortunately, a few recent initiations such as Terex (TEX) and CPFL Energia (CPL) have been diving, which has had me adding to the positions rather agressively; but in reality I ought not to get too agressive in a market as volatile as this. As evidenced by Sirius, there are wild swings out there and having too broad of a long-term thesis may cause to me to succumb to the prevailing negative forces in the market, instead of capitalizing on short-term trading opportunities.
I guess what I'm saying is, I really need to move some money out of Terex, even if it is at a loss. It simply isn't smart to be so fully invested, and having almost 20 positions in the portfolio is a little ridiculous too (it's getting hard to keep up on it all)! I really need to simplify, and that will be my goal over the coming weeks.
I'm just hoping for some strength to make any selling a little less painful.
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geokills
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Re: Stock Update for June 20, 2008 - TEX, BDK, PBR, NOV, SWN, RTN, WMT, MCD [Re: geokills]
#8555528 - 06/23/08 06:34 PM (15 years, 7 months ago) |
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Well I didn't get the pop in Terex (TEX) that I was hoping for, but I did trim about 20% of the position at $61.50. This booked an 11% loss on those 17 shares, which I'm not too happy about in and of itself, but I am happy to have my cash position at a healthier 8%, as I would like to keep a minimum of 10% in this volatile (i.e. weak) market environment. So I will continue to look for strength in order to sell my weak positions, building up cash, and re-committing that capital to the stocks that I have more conviction in for the near-term (namely the natural gas/oil names). Speaking of which, my National Oilwell Varco (NOV) was up over 8% today, and Southwestern Energy (SWN) up almost 6% on the day! These positions are still small in my portfolio, and I will be looking to add to them on weakness.
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wiggles
Miffed a Milf



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Re: Stock Update for June 20, 2008 - TEX, BDK, PBR, NOV, SWN, RTN, WMT, MCD [Re: geokills]
#8557580 - 06/24/08 08:48 AM (15 years, 7 months ago) |
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I'm still holding on to Sirius. XM radios and sirius come stock with a number of vehicles, and that means SOME subscription base. The goldman sachs reccomendation to sell isn't going to help in the meantime, but once the merger goes through it'll hopefully get it back over the 3$/share I purchased at.
For now I'm focusing on Chinese Gambling, and Petrol.
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  You can turn your back on a person, but never turn your back on a drug, especially when its waving a razor sharp hunting knife in your eye. Hunter S. Thompson
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AroundtheSon
Learning to See



Registered: 01/11/07
Posts: 4,427
Loc: Midwest.
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Re: Stock Update for June 20, 2008 - TEX, BDK, PBR, NOV, SWN, RTN, WMT, MCD [Re: wiggles]
#8559894 - 06/24/08 08:22 PM (15 years, 7 months ago) |
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I bought Silver Wheaton (SLW), and lost 18 bucks the first day. 
I got in it for the long haul anyway, so I'm not concerned, but it was a shocking first day of market play.
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geokills
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Registered: 05/08/01
Posts: 23,417
Loc: city of angels
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Stock Update for June 25, 2008 - TEX, SWN [Re: geokills]
#8562910 - 06/25/08 02:31 PM (15 years, 7 months ago) |
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The U.S. Federal Reserve today held interest rates unchanged at 2%, with an accompanying statement that has essentially switched their bias from lowering rates towards future rate hikes in order to address inflationary concerns. The Fed indicated that there will be little chance of further rate cutting, but that the economy is still struggling and this is why rates will not be hiked at this time. The implications for this move should have a fairly sizeable negative affect on banking stocks, and may put negative pressure on oil (though I believe that global demand will still cause oil to remain above $120 a barrel).
- Southwestern Energy (SWN) - Bought 23 shares @ $45
As I mentioned in my last post here, I would be looking for weakness to increase my stake in SWN. It came today, with the stock off nearly 5% on account of a pullback in oil prices due to a government report showing that crude supply inventory rose unexpectedly for the first time in six weeks and that demand for petroleum products has fallen more than 2% in the past month. Southwestern Energy still boasts some of the highest growth in the industry, and with its low finding and development costs, and my belief that natural gas will remain strong going forward, I am going to use this as an opportunity to buy additional shares just below my initial cost basis.
- Terex (TEX) - Sold 21 shares @ $59
It really sucks having to sell a quality name into weakness, almost 15% below my cost basis. But my cash position is just way too low (still below 10% after this sale), and I have more conviction in my Deere (DE) position than I do in TEX. While I still believe in the long-term story for Terex, it has been a definite loser in the near term, and I am finding it very difficult to go against the trend here.
- Nucor (NUE) & Vale do Rio Doce (RIO) - Thoughts on a SWAP
I fairly recently initiated a position in Nucor Steel, and while I believe the company will have more room to grow, I am warming up to the idea of swapping out of NUE and into RIO. Both stocks trade for the same Price to Earnings (PE) multiple, however RIO is trading at a significant discount when you factor in its growth, with a Price to Earnings Growth (PEG) multiple of 0.65 compared to Nucor's PEG of 2 (though I do believe Nucor will grow at a faster clip than the current estimates would have us believe). RIO, which is a Brazilian metals and mining company, still has great exposure to the strength in steel as they are a major producer of iron ore and ore pellets, a necessary ingredient for steel fabrication. In addition to this leverage to steel, they also produce copper, coal, and potash amongst many other materials. Copper and coal are definitely strong, and potash is a very popular fertilizer for the agricultural industry (just look at the performance of potash producing stocks such as Mosaic (MOS) and Potash (POT) over the last two years). Vale do Rio Doce offers more diversification than Nucor, and with its more impressive growth I believe it may be the better choice for my portfolio. I may even swap out of some of my Yamana Gold (AUY) to fund a purchase of RIO.
- Indymac (IMB), National City (NCC), Washington Mutual (WM) - Thoughts on a SHORT
As the Federal Reserve made it clear today that their bias is tilted towards raising interest rates in the future in order to combat inflation, this could be an opportunity to short struggling banks that, without the aid of additional capital and lower interest rates, will have an exceptionally difficult time staying afloat. Though all three of the aforementioned banks have already come down a lot, with interest rates set to rise there could still be a lot of downside, and as a result, I am getting ready to short sell one of these on any significant strength. WaMu and Indymac have continued to make toxic loans, and though National City claims that their loan losses are peaking, if the Fed continues with its change in bias and rates fail to come down, there will be another round of losses for them as well.
Discretionary Portfolio as of 6/25/2008:- 7.5% Cash
- 6.9% Yamana Gold (AUY)
- 6.7% McDonalds (MCD)
- 6.6% Altria (MO)
- 6.4% Deere (DE)
- 6.4% CPFL Energia (CPL)
- 6.3% Transocean (RIG)
- 6.2% Proctor & Gamble (PG)
- 5.6% WalMart (WMT)
- 5.5% Schering-Plough (SGP)
- 5.3% Nucor Steel (NUE)
- 4.6% Southwestern Energy (SWN)
- 4.4% Petrobras (PBR)
- 4.2% Black & Decker (BDK)
- 4.0% Raytheon (RTN)
- 3.7% Terex (TEX)
- 3.6% Apple (AAPL)
- 3.1% National Oilwell Varco (NOV)
- 3.0% Goldman Sachs (GS)
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-------------------- ┼ ··∙ long live the shroomery ∙·· ┼ ...╬π╥ ╥π╬...
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geokills
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Registered: 05/08/01
Posts: 23,417
Loc: city of angels
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Stock Update for June 26, 2008 - TEX, SWN [Re: geokills]
#8567169 - 06/26/08 02:57 PM (15 years, 7 months ago) |
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Should have jumped on those short ideas yesterday afterall...  IMB was down over 25% today, Washington Mutual off 9%, and Nat City off 6%.
In light of the Dow and S&P both breaking key support levels, I am cutting back on my exposure and building cash in preparation for continued weakness as the market searches for a new level of support. Thankfully, I can at least take some solace in the fact that the last time we were at these levels on the major averages (January and March), my portfolio was 4.2% lower... which shows that I have been performing well on a relative basis with respect to my previous performance. Still getting killed here, but I suppose its not as bad as it could be.
- Terex (TEX) - Closed Position at $54.12
Down 10% on the day, and while I have a feeling this one will find its bottom soon (it has a support level at $50), I need to prevent any additional capital loss on this position and redeploy the cash into names with which I have greater conviction. I may come back to this one for a trade, but in this environment, I need to step back and take a more conservative stance.
- Goldman Sachs (GS) - Closed Position at $177.77
Still showing a gain, and still believing that Goldman will come out of the current mess as a stronger firm having been able to take market share from the weaker players, I also feel that the overall pressure on the banking sector is going to keep a lid on this stock in the meanwhile - even if it is unwarranted. I would like to reopen this position if I can get the shares below $165.
- 14% Cash
- 7.5% Yamana Gold (AUY)
- 6.7% McDonalds (MCD)
- 6.6% Altria (MO)
- 6.5% CPFL Energia (CPL)
- 6.4% Transocean (RIG)
- 6.3% Deere (DE)
- 6.2% Proctor & Gamble (PG)
- 5.6% WalMart (WMT)
- 5.4% Schering-Plough (SGP)
- 5.2% Nucor Steel (NUE)
- 4.7% Southwestern Energy (SWN)
- 4.4% Petrobras (PBR)
- 4.1% Black & Decker (BDK)
- 3.9% Raytheon (RTN)
- 3.5% Apple (AAPL)
- 3.1% National Oilwell Varco (NOV)
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-------------------- ┼ ··∙ long live the shroomery ∙·· ┼ ...╬π╥ ╥π╬...
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geokills
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Registered: 05/08/01
Posts: 23,417
Loc: city of angels
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Stock Update for June 27, 2008 - NUE, RIO, AUY, DVN [Re: geokills]
#8571329 - 06/27/08 02:54 PM (15 years, 7 months ago) |
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Sure am glad I relieved myself of the money-pit that is Terex (TEX). Though the company should be fine, there seems to be no patience for industrial manufacturers in this market, and so the stock is down again today another whopping 5%! As of the close today, Terex has lost nearly one-third of its value since the month of June began! If I had extra cash on the sidelines, I would love to have held onto and even added to my Terex position for the long haul at this level, but fact of the matter is that I believe there are other sectors with less resistance, and that is where I aim to focus my money right now. Nevertheless, I would not be at all surprised to see a bounce in the stock from these levels... I mean, this is a great company, building great industrial equipment and trading at half the industry average, and only 0.6x Price to Earnings Growth! For long-term value investors, this seems like a hot ticket.
Overall, the markets were down today, with the S&P500 posting a 0.36% loss, and the Dow down almost a full percent. To gloat, my portfolio was up a full percentage point, largely thanks to my positions in Yamana Gold (AUY) and CPFL Energia (CPL), Schering-Plough (SGP), and Southwestern Energy (SWN); up 6.15%, 7.88%, 3.48%, and 2.78% respectively on the day. I'll admit CPL had me a little worried there as it flirted with the $60 level earlier this week. It's too bad the position was already one of my largest and I was short on cash, as it would have been nice to add at $60 and catch the quick 10 point (16%+) recovery move over the last five days.
- Nucor (NUE) & Vale do Rio Doce (RIO) - Continued thoughts on a SWAP
I did a little more research concerning my potential SWAP out of Nucor Steel (NUE) and into the Brazilian miner Vale do Rio Doce (RIO), and have decided to stick with Nucor for the near term. It turns out that though RIO does garner nearly half of its revenue through the sale of iron ore pellets that it provides to the steel industry, it also made a recent purchase of Inco Ltd. which made it one of the world's largest producers of nickel. Unfortunately, it looks like the market for nickel may be a little soft, and since the Inco acquisition also added a lot of debt to RIO's balance sheet, I'd rather keep my money on the pure steel play that is Nucor... even though I will miss the added benefit of the other materials RIO produces, such as copper, gold, aluminum and potash. If RIO can come down toward $30 a share (currently around $35), I will definitely reconsider the position. But for now, I think Nucor probably has better upside potential at the current level.
- Yamana Gold (AUY) - Sold 60 shares @ $16.65
This stock has been incredibly strong over the past two days, jumping 10% on the heels of weak dollar performance and continued worries about inflation. As the position had become the largest in my portfolio, it seems smart to book some of these quick profits, as stocks will usually settle out and pull back after such a strong short-term gain. As I am also looking to increase my exposure to the natural gas / oil / energy complex, it doesn't hurt to build up a little extra cash to fund my next purchase. I still believe in the long-term fundamentals of gold, and am not looking to close this position by a long shot. In fact, I would like to buy back these 60 shares on any weakness to the $15 level or below.
- Devon Energy (DVN) - Initiated a position of 22 shares @ $114.74
In keeping with the up trends in the energy, oil and gas sectors, I feel that Devon Energy will be a beneficiary of strong natural gas prices going forward. Devon Energy is one of the largest independent oil and gas exploration and production companies in the US. They have done a good job of selling their slower growth projects in order to pay off debt and fund exploration in the more promising regions, such as the Barnett Shale in Texas which is among the largest onshore natural gas fields in North America (they also have quite a few other active operations). 50% of earnings come from the US, with an additional 20% from Canada. Keeping in mind that historically natural gas has traded at one-sixth the value of crude oil, natural gas is severely undervalued with respect to crude oil topping $140 a barrel (to put it into perspective given the historical correlation, crude oil should be trading at only $65 a barrel)! This, in conjunction with the idea that the US will begin to use more natural gas as an energy source in order to ween itself off of foreign oil, should further help bolster prices.
Discretionary Portfolio as of 6/27/2008:- 11.7% Cash
- 7.0% CPFL Energia (CPL)
- 6.6% McDonalds (MCD)
- 6.5% Yamana Gold (AUY)
- 6.4% Transocean (RIG)
- 6.3% Altria (MO)
- 6.3% Deere (DE)
- 5.9% Proctor & Gamble (PG)
- 5.5% Schering-Plough (SGP)
- 5.5% WalMart (WMT)
- 5.2% Nucor Steel (NUE)
- 4.7% Southwestern Energy (SWN)
- 4.4% Petrobras (PBR)
- 4.1% Black & Decker (BDK)
- 3.9% Raytheon (RTN)
- 3.5% Apple (AAPL)
- 3.5% Devon Energy (DVN)
- 3.1% National Oilwell Varco (NOV)
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-------------------- ┼ ··∙ long live the shroomery ∙·· ┼ ...╬π╥ ╥π╬...
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ZippoZ
Knomadic



Registered: 06/17/03
Posts: 13,227
Loc: Pongyang, North Korea
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Re: Stock Update for June 27, 2008 - NUE, RIO, AUY, DVN [Re: geokills]
#8585765 - 07/01/08 09:13 PM (15 years, 6 months ago) |
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im glad your keeping this updated Geo, i really do like seeing how you maneuver the market.
-------------------- PEACE
zippoz "in times of widespread chaos and confusion, it has been the duty of more advanced human beings - artists, scientists, clowns, and philosophers - to create order. In such times as ours however, when there is too much order, too much m management, too much programming and control, it becomes the duty of superior men and women and women to fling their favorite monkey wrenches into the machinery. To relieve the repression of the human spirit, they must sow doubt and disruption" "People do it every day, they talk to themselves ... they see themselves as they'd like to be, they don't have the courage you have, to just run with it."
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geokills
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Registered: 05/08/01
Posts: 23,417
Loc: city of angels
Last seen: 9 seconds
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Stock Update for July 2, 2008 - BDK, NUE [Re: ZippoZ]
#8588169 - 07/02/08 03:19 PM (15 years, 6 months ago) |
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Thanks nomad... I forgot to update yesterday, so here we go:
- Black & Decker (BDK) - Closed Position @ $56.50
I sold this position yesterday at a 10% loss because its just a little too early to be involved in this "early cycle" name. Fortune Brands (FO) came out with a very negative quarterly report earlier this week, which bodes poorly for Black & Decker as the two companies are involved in much of the same market. So rather than take the pain, I decided to raise cash and close my BDK position for a loss at this time, as I believe they could have trouble on their next quarterly report that may cause the stock to selloff further.
- Nucor Steel (NUE) - Bought 30 shares @ $65
Then today, though I haven't been at my computer most of the time, an automatic buy order was triggered for 30 shares @ $65 on this position. Not sure if this was wise, as the stock closed down around $62, off almost 15% on the day! Volume was exceptionally heavy, with almost 4 times the average daily trading volume. This happened on account of sector rotation, where large funds are making a quick exit on material momentum stocks (such as the steels), and moving the cash into defensive consumer staples such as Proctor & Gamble (PG), Coke (KO), and various drug stocks, which are perceived as defensive. To exacerbate the situation, General Motors is cutting back production by 12%, and there are fears that many of the steel industry's customers are heading to bankruptcy. There is also concern that slowing in Europe could put pressure on the domestic steelmakers such as Nucor, as any oversupply could result in increased European steel exports, which will of course negatively affect the supply/demand picture here. I would like to believe that China will support enough demand to keep worldwide steel supplies low and the price high, but today's action is a little shocking and we may still have farther to fall before the uptrend can resume. I'll be keeping a close eye on this position over the coming days.
Discretionary Portfolio as of 7/2/2008:- 13.2% Cash
- 7.0% Nucor Steel (NUE)
- 6.9% McDonalds (MCD)
- 6.6% CPFL Energia (CPL)
- 6.4% Yamana Gold (AUY)
- 6.3% Altria (MO)
- 6.3% Deere (DE)
- 6.3% Proctor & Gamble (PG)
- 6.2% Transocean (RIG)
- 5.6% WalMart (WMT)
- 5.6% Schering-Plough (SGP)
- 4.9% Southwestern Energy (SWN)
- 4.4% PetroBras (PBR)
- 4.0% Raytheon (RTN)
- 3.7% Devon Energy (DVN)
- 3.6% Apple (AAPL)
- 3.0% National Oilwell Varco (NOV)
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-------------------- ┼ ··∙ long live the shroomery ∙·· ┼ ...╬π╥ ╥π╬...
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AroundtheSon
Learning to See



Registered: 01/11/07
Posts: 4,427
Loc: Midwest.
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Re: Stock Update for July 2, 2008 - BDK, NUE [Re: geokills]
#8621426 - 07/11/08 11:38 AM (15 years, 6 months ago) |
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Hi there. Hope I can tag along too for a bit.
Got rid of the Silver at a small profit, and got AUY on the dip. :crossesfingers:
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ZippoZ
Knomadic



Registered: 06/17/03
Posts: 13,227
Loc: Pongyang, North Korea
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Re: Stock Update for July 2, 2008 - BDK, NUE [Re: AroundtheSon]
#8621635 - 07/11/08 12:32 PM (15 years, 6 months ago) |
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geo, i havent seen an update in a while, how are you handling the downturn of the markets today?
-------------------- PEACE
zippoz "in times of widespread chaos and confusion, it has been the duty of more advanced human beings - artists, scientists, clowns, and philosophers - to create order. In such times as ours however, when there is too much order, too much m management, too much programming and control, it becomes the duty of superior men and women and women to fling their favorite monkey wrenches into the machinery. To relieve the repression of the human spirit, they must sow doubt and disruption" "People do it every day, they talk to themselves ... they see themselves as they'd like to be, they don't have the courage you have, to just run with it."
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goobler
Reanimated




Registered: 02/24/03
Posts: 48,909
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Re: Stock Update for July 2, 2008 - BDK, NUE [Re: ZippoZ]
#8622072 - 07/11/08 02:10 PM (15 years, 6 months ago) |
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the market is brutal
I'm gonna wait it out, not dumping anything yet
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