Ss Long Term Holdings

10/30/15 Moving all assets to Vanguard In-Kind transfer and closing the basket. Going to keep the LinkedIn.

5/12/14 LNKD 20@140.00 L 148.69

2/13/14 Trying to grow this basket. 20 CTSH L@98 LC 98.45, very good chance this will hit. Now for the crazy move. I try to keep a bit of cash in some of the baskets in case of a "bluebird", a stock really dropping that I have already researched giving me an unexpected opportunity. But I am busy, I can't work the market all day, I have to work, so I use limits, this one will only hit if things really go my way:
20 TSLA L@150 LC 195.32

2/12/14 LinkedIn dropped today, added 10@Market 192.56
Update 2/13/14 Order closed, but we paid 192.92 (risk of after hours trading) LC 192.91

12/2/13 Cognizant Technology (CTSH). Thesis, the harder it gets to implement the health care exchanges, the more you turn to professionals. While implementing the IT side of health care is not their only strength, this consultancy has street creds in the domain. Almost zero debt. Limit, 25@93.00 last close was 93.89.

1/11/13 LinkedIn (LNKD). Every professional uses LinkedIn, but my account is free so how do they make money. They are also in the job search business. Set a limit@116.00 for ten shares to add to my position.
Update February 4 close 123.30

Thesis Buy and Hold Great Companies

In the Ts basket, when an equity appreciates 20% or more and I have reached the one year birthday ( wonder if that is still the tax law post fiscal cliff? ), I often sell it and use the proceeds to buy a CD or Municipal bond. Even though the intrest is low, I am using money that appreciated 20%. I have been keeping the dates fairly short ( 2 - 5 years ), so hopefully fixed income will be a better investment as they come due.

In the Ss basket, the idea is to pick companies that I want to hold for a decade or more through bull and bear markets. Two examples are Intel and IBM, we bought IBM when we were first married so we have held it 25 years. I sold a bit at one point, but have also added to my position on dips.

Fool Funds

Thesis: I do not normally favor mutual funds, but this is a long term investment. I am starting to prefer Vanguard for mutual funds and ETFs, but I have been in each of these since they started.


7/23/13 FOOLX, the Motley Fool Independence Fund is up 22% for the year. NAV is 18.10

7/23/13 TMFGX, the Motley Fool Great America Fund is up over 33% for the year. NAV is 15.90

7/23/13 TMFEX, the Motley Fool Epic Voyage Fund is up 21% for the year. NAV is 12.04 and that is impressive since international stocks have been pounded this year. This could be an opportunity for some additional funding.

Fk basket for value investing

11/29/13 Against my better judgement, I sold half of my Omega Protein ( OME), 500 shares, market, last closed at 13.92. Am well past the 1 year capital gains. Thesis on the sale,  my OME holdings have been underwater the majority of the time I have held them, so this has been so wonderful to see a significant profit. The fishing world is uncertain at best. I am keeping a position open, some analysts predict they can reach 14.5 in 2014.

7/23/13 Needless to say finding value opportunities in the bull market of July 2013 is challenging. My thesis is that it is not a crime to keep money on the sidelines when you can't find a bargain for your value basket.

7/23/13 Sold part of my position in Alamo Group (ALG), did it as  a 3% Stop Loss, so if/when it hits 41 something or another the trade should execute.

Ts Mutual Fund Red Green and spot orders 2013

I am not an expert investor. This blog is my trading notebook for myself and my family though you are welcome to any of the research. Please do your own research and make your own decisions.

Thesis

This is the only basket that I trade actively and when I retire I will probably give this up and cash out; all other baskets are long buy and hold. This is also my "incubator" for future core stocks that will be long term positions.

My thesis for red/green analysis is that if a stock is very far gone in the negative or red direction ( MAKO ) there isn't much to do , but sell or hold on hoping the company turns around. If a stock is very positive, hopefully I saw that trend and increased my holding and at some point I will profit take ( one of the rules of this basket). So the action is really around the middle, stocks that are slightly positive and negative. Past Ts Red Green reports confirm they change places.

Rules of the basket:
(Last updated April 28, 2013)

• No big bets, lots of small orders which means incurring a 0.5% -1% overhead per transaction for the trading fee
• Check on this account often, this is by far the most dynamic account you manage
• Preference is given to companies that are not debt ridden using Google Finance debt to assets ratio  < 20 ( and also being mindful of the debt to equity)
• If you have a high flyer that starts to drop it is OK to profit take and protect principle, you can always buy it back when it drops. If it keeps going up after you sell, oh well, there's too many fish in the sea
• During bull markets, be willing to profit take on companies that appreciate more than 20% and store that money in a safer instrument
• During recessions, corrections and bear markets be willing to open and add to positions
• It is real retirement savings you are spending so research the company even if you have to rely on industry analysts
• Remember the rule of unrealized loss. If you believe it is a soundly run company with good product, even if the market drives it way down, hang on. MAKO was a fairly big bet and it is down 70% or so, but my thesis is we are going to keep needing surgical robots.
• Use limit orders whenever possible, they do not all have to hit

8/2/13 Whole Foods (WFM) 54.58 and Proctor Gamble (PG) 80.96, Medtronic (MBT) 54.94 dropped a bit, added ten shares of each to my position. Opened a position with Apogee (APOG), 45 shares market, 27.03.

8/1/13 Polypore (PP0)
This is still negative for me and is very volatile, but added 15 shares@market, 43.44

7/24/13 ISRG
Robotic surgery is the future so Intuitive, a market leader, should do well. However, they missed earnings and have really dropped. I had this stock before, but did some profit taking with it. Trying to reopen a position with 10 shares on a limit order or 380.00, currently it is trading at 386.89.
8/1/13 395.26

7/23/13 Reds, top performing, descending order
                30  90  180  1yr  5yr
MCD         -   -      4     3    3
FPX          2   2     2     1    2
SSL          1   1     3     2    -
COH        3   3     1     4     1
BRCM     -   -      -      5     4

7/23/13 Greens, lowest performing, descending order
                30  90  180  1yr  5yr
CTXS       2    -     -      -     1
CORR      3    2     1     -      -
INTU       1    -      -     1     2
TEVA      4    1     2     -     -
QCOM     -     -     -     2     3

CORR L@7.50 70 shares last close 7.63
CTXS  L@64.00 10 shares last close 66.07

7/21/13 Athena Health Care was up 22% and it dropped 4.00 a share, added ten shares to my position. Opening a small position on an IPO ETF (FPX) 25 shares at market.

6/26/13 Silver (SLV ETF) just dropped 5%. Opening a small position, 30 shares@ market, 50 shares limit at 17.25.
7/21/13 18.88 Missed the boat, sometimes a limit order means not striking paydirt. Oh well. I do have 30 shares that I purchased at market. Beats nothing.

5/17/13 Getting sketchy, market feels overpriced
ENH 15 Limit@48.5
IRBT 20 Limit@33.0
PANW 10@ 53.0

5/1/13 Cummins (CMI) got trashed today, 6% drop. Bought 5 shares at market.
7/23/13 117.67

4/30/13 Not one single limit hit today, the market was definitely trending up. At least when I look at the baskets I see green everywhere and get to congratulate myself on how smart I am (yes, I am kidding, tomorrow it might be mostly red and I will be dumb). Do need to keep a close eye on Liquidity Services (LQDT), I am still up 15%.
7/23/13 28.94 down 22% in 30 days.

4/27/13
1) Lowest greens, best to lowest
                 30  90  180  1yr  5yr
RAVN       -     1   1      2    1
NOV         -     -    -      -     -
CORR       -     3   -      -      -
VIVO       -      -   -      -      -
ERIE       1      2   2     1     2

Intuition would say that the NOV and VIVO are not the place to add money to, but the S&P Fair Value for NOV is a 5 and the Schwab rating is a B, where Erie is a 1 C and RAVN is a 1+ D. Limit order to accumulate more NOV.

2) Next best performing flight, best to lowest
ATHN      -      2   1   1      1    
MCD       1      1   2   4      3
WFM      2      -    -    3      2
CHEOY   -      -   -     -      4
FDX        -      -    3    2     -

ATHN looks good and it should, it has a P/E of 188.62. Thesis: this is like a dating service for patients and health care providers. As Obamacare is rolled out they are well positioned. But to win one needs the right stock, but also at the right price. It would only be smart to add to this position on a dip. They are a D1. Pass.

McDonalds is a steady Eddie, but with their debt level, I am not inclined to add to the position right now. They are a C 2, S&P says buy. Pass.

WFM is a D 2, I only have a small position open to look at them. Pass.

CHEOY is a long term play. Thesis: hearing aids is a good business to be in. Pass.

FDX is also in the eCommerce basket (Sk). The worse things are for the USPS, the better UPS and FedEx are likely to do.

3) Best performing reds, best to lowest
                 30  90  180  1yr  5yr %increase for 1 year
QCOM      -     -     3     -      4    (4)
BCPC       -     1     1     1      1    47
PANW      -     -     -      2      2      1
COH         1    2     4     -       3   (22)
IBKR        -    3     2     -       -    (3.5)

Coach of course got that pop based on their earnings.

I bought Balchem in July 2011 and it tanked, but it is up 47% for the year. Schwab rates it a B, S&P Fair Value is a 2-. Another case of the right stock, but needs to be the right price. This is the result of my work so far today, note VIVO got downgraded to 19.00

4) Genworth (GNW). I started a research workup on this stock for basket Ck (dividends), only to realize the dividend party ended years ago. Then I thought about a small position in Ts. After a couple hours I am conflicted. No action at this time.

5) RKUS Rukus. Thesis: this is a better wireless mousetrap. They are essentially the BOSE of the wireless world AND they are down something like 13% in past 30 days. Opening a position with 40 market and also 30 L@19 and 50 L@18.5.

6) Seattle Genomics (SGEN). Thesis: with an apparently effective anti-cancer drug in the field and more in clinical trials and no debt and lots of cross agreements, they could do very well. They last closed at 37.38. 30 Limit@37.30, 40 Limit@37.00, 40 Limit@36.75.

4/25/13 Not sure why, but we had some drops, so I am doing two market, two limit buying on dips:

4/23/13

1) ATHN. Opened a possible position on Athena Health. My thesis is that as Obamacare continues along, the complexity will push all smaller providers to use cloud type billing. 20 shares Limit@90.

2) COH. Coach has been a disappointment in a number of ways. I am down 16% since I opened the position, luckily it is a very small tracking type position. However, this article suggests a number of people are selling puts ahead of the earnings report. It appears that someone thinks the stock is about to rise. I am not sure that I agree, partly because they are modifying the strategy that got them where they are and partly because a strike of 52.50 is beyond my ability so see happening, but once again, the Wall Street guys have IBM Z series mainframes and I have Google and a Mac. Decision: no action.

3) WFC. Wells Fargo is experimenting with a new style branch according to this article. Looks a lot like an Apple store to me. Let's add 25 shares @Market.

4/20/13
1) Open orders

2) Recent activity

3) Lowest performing greens best to worst

                  5   30  90  180  1yr  5yr

CTXS         -    -    -     3

MCD         -     1   1     2

CMI          -      -   -     1

WFM         -     2   -     -

FDX          -     -    -     4

Decision: MCD Limit buy 10@94.00 Last close 99.92

4) Next higher performing greens best to worst

                  5   30  90  180  1yr  5yr

ORCL        -    -    -     3      2     3

ROLL        -    -    -     4      3     4

ULTI         -    -    -     -       1     1

MELI        -    -    1     2      -      2

HURC       -    -    -     1      -      -

Decision: Profit take ULTI, close position, but put it in the watch list, I like the fact it does not correlate strongly with the other four. Action: find another equity to replace it. Hold the line on HURC.

4/16/13 Market dropped today possibly due to the Boston Marathon bomb. Kathy and I have been praying for the injured and those grieving the loss of a loved one. But we are adding to some positions:

Lowest performing greens:
                  5   30  90
HURC        -    -    -
NOV          -    -    -
NUAN       2   1    -
WFM         1   -    -
IRBT         -    2   1

Decision: Add to my NOV position? Dunno, it seems incredibly stupid to me, but it is a small bet ( 15 shares) and it dropped like a rock today and my thesis remains that it is a great company poised to do well and if you buy on dips in an aging bull market you have to accept a few drops.

4/3/13
1) Top performing greens ( excludes TSRYY)
                                      4/27/13      30   90
                  5   30  90  180  1yr  5yr
Z                -    1    1    2     1     2
DIS            2    4    4    4     2     1
OII             -    5    3    3     5     3
MDT          3   3    5    5     4     4
BSX           1   2    2    1     3     5
OII dropped 3.76% today 10@Market last close was 63.02
BSX (B 3) and MDT (B 4) have a little more debt that I like to see, going to sleep on that one.
4/27/13 Speaking of medical device companies, Spectranetics (SPNC) is going to sell some stock, it will be interesting to see what impact that has. Not that debt is the only factor, but they have less debt than most of the players in this space.

2) Green Analysis, best to least heat 1
NOV          -    2    -     -      -    2
FDX          -    -    2     1     2    4
HURC       -    -    1     2     -     -
CHEOY    -   -     -      -      1    3
NUAN      1  1     -     -       -    1
NUAN Limit 30@20.75 last close 21.06

3) Next lower tier (RDWR is a slight red)
BRCM    -    -     -      -       -    4
MCD      -    3    2      1      1    3
IRBT     1    1    1      2      -     5
LQDT    -   -     -       -       -     1
RDWR   -   2    3      3      2     2
RDWR Limit 20@37.20
IRBT Limit 30@24.50
MCD Market 10 last close 99.25

4) Top (best performing) reds
INTU    -   -     3       1      1     2
RAVN  -   1     1       2      2     3
WFM    -   -     -       -       4     1
PANW  -   -     4      -        3    4
TEVA   -   2    2      -        -     -
RAVN Limit 20@31.20

4/1/13 NUAN Deja Vu! I researched this company a year and a half ago, my thesis was that people were going to want it because it is faster than typing. My wife prefers voice search on mobile to using the itty bitty keyboard. And I lost money. And now I am thinking about it again. It has a PE of 37 AND a debt ratio of 36.5. I do not have a basket that I can add this to under the rules of any of my baskets, but I do have three exceptions I can use in Ts, my mutual fund.
Decision: Commit red flag #1 of 2013. Very small open position, 50@Market, last close was 20.18, hopefully this is not my April Fools Joke on myself.

Upcoming Global Macro Forces ( 3 to 5 years)

Jack, from Merrill Lynch sent me a document to read saying it was written by one of the brightest analysts out there. I did my best to get through it, but it was slow slogging at best.

This is my best effort to write down my interpretation of what they said.

Concept 1 is the idea of a three speed world. China and other successful emerging economies are high speed. America, at 2% growth is an example of medium speed. Japan ( if Abenomics is not able to pull them out of stagflation) and some of the poorer European countries are low speed.

Concept 2 is the observation of very active central banks. I have noticed this myself and wondered how it would all work out. The report refers to the central bank activity as experimental. It does say it has been beneficial for banks, but less clear for investors in the future. The observation is made multiple times that a result of central bank activity is that the price of certain investments may not be tied to the true reality of the market ( I think that means potential for bubble, but they did not say that). In order not to get totally blown away when the qualitative easing free ride ends, make sure to carefully consider the fundamentals of any investments. The authors talk about Whatever It Takes (WIT), which is what the Fed did to avoid disaster as described in Too Big To Fail and toning it down to avoid Moral Hazard ( doing whatever you can to save your country at the expense of the global economy).
6/20/13 The Fed, Ben Bernanke, gave a speech about winding down quantitative easing and caused the markets to drop a bit over 2% the next day.

Concept 3 is the branch. The author of the report believes we are headed towards a branch, or fork in the road. Either the system heals itself, focuses on deleveraging and political stability ( come on US Congress, work together), or we reach a period of even slower growth which would be devastating to the economies that are already in trouble such as certain countries in Europe. Some countries are much closer to this branch than others, the ones already in trouble (Spain, Portugal, Greece, etc).

Concept 4, this is the scary one, unless we can increase growth, haircuts are almost certain. To quote Wikipedia, "Private sector involvement (PSI) refers to the participation of the private sector in projects of the government. It has come mostly to mean financial affairs, and specifically the participation of the private sector in the write downs of sovereign debt in instances of haircut." Haircuts are bad things in this context, if you have 100k invested and there is a write down, you may end up with 60k or some such.

Concept 5 was Zombification. Be warned that different people use the word Zombie in economics differently. Yesterday, the Bank of Canada warned of Zombie banks, banks and companies that really are not alive, but are able to survive in the current era due to central bank policy of very low interest rates. The problem is these are consuming these resources that are meant to restart the Canadian economy and when reality emerges will probably fail at that time. This makes me feel very good about our strategy of avoiding buying stock in companies that have a lot of debt. The document seems to use Zombification a bit differently, but if they define exactly what they mean, I missed it.
7/10/13 Edward Hadas argues that an aging population is the major driver of Zombification in a blog post.

There were several recommendations, here is one that jumped out at me.  "Look more intensely for opportunities away from the central bank wave." This is one of those easily said, but hard to execute pieces of advice. I smiled because the document implies they have people on staff that can do exactly that and if so, I am happy for them. I am guessing the secret is to look for other macro trends such as:
- Aging population in USA, look for health care wins, electric wheel chairs, home elevators, nursing homes etc.
- Declining Caucasion influence in USA, look for international restaurant chains, Latin, Indian, Asian.
- Technology game changers such as 3D printing, surgical robots, etc.

Another suggestion is to increase defensive positioning. I think this is the idea that people are going to have to buy soap and shampoo regardless of how the economy does. That did not seem to be a super workable strategy in the great recession. I can see moving my portfolio a percent or two to defensive, mostly by increasing mega-cap stock positions and either holding the line or profit taking on some small cap and medium cap positions. On the other hand, if what they mean by defensive is putting some cash on the sidelines, I am all in. The document says, "Do not give up liquidity cheaply." Amen, I suggested to Hunter, Harry and Trey, to put some money on the sidelines and keep some powder dry about six months ago. Granted, the market continued to go up, but there should be some buying opportunities in the months ahead.

Ak - Bond Funds become individual Munis

I am not an expert investor. This is my trading notebook for myself and close family, but you are welcome to any of my research. All I ask is that you do your own research and make your own decisions.

6/24/13 According to CNBC, there are now record outflows from bond funds to the tune of 40 billion.  If we use DODIX as a proxy:
7/23/13 the NAV was 13.57, on 4/10/13 it was 13.88
ACTION: set a calendar alert to reread this in six months, bond funds may become pretty cheap.

5/1/13 This Lipper report does not make sense to me. More money is flowing into bond funds than equities and exiting large caps? Thesis: the baby boomers are starting to retire and their Edward Jones (no insult intended, I have an EJ guy helping me with part of my portfolio) advisors are putting them into (expensive) fixed income bond funds. Let's just pick one of my former holdings to sample:
DODIX is up 2.12% for the year. Sounds good, but why? Some part of that has to be the inflows, according to Lipper, of 42.3 Billion in the month of March alone. Now here is the crazy thing. If we go to the fixed income section of our online trading site, we see -- utter crap --. If I can get 1.5% Yield to Maturity on a 3 year horizon the skies open up and the angels start singing. When DODIX ( or any other bond fund) bonds get called or mature, we can say bye bye to that sweet 5 -7% interest rate and have to lock in real money at rates that frankly will not keep up with inflation.

Repeat not an expert, but I have been an analyst of every sort for most of my working life. I suspect a bond fund bubble (bofunble). And if I am right, who gets hurt? Hard working folks that put in 65 years and listened to the advice of their financial analyst and are counting on that investment for monthly income.

4/20/13 Feeling pretty good about getting out of bond funds and into short time horizon Municipal bonds. There is more risk in some sense ( inflation, default etc), but also more return. If I had stayed in the bond funds, this is what it would look like in per cent gains and losses:
                  30       90        180 days
BKLN       (.16)    (.33)      .72
TIP           (.33)    (.09)      (.21)
DODIX     (.07)    (.22)      (.14)
FHIGX      .89      (.44)       .44
PRFSX      .18       .18         0
USSTX       0         0          (.09)

Update March 1, 2013
About halfway through taking the money from the bond funds and buying individual Municipal bonds in basket Ak. Looking for stable outlooks, A or better, short horizon max 2016. The crazy thing is that two of the bonds I tried to buy sold out from under me, so someone is also trying to buy bonds.

I read a Zacks article that recommends four international bond funds: FNMIX | PREMX | JEMDX | GAMDX | REBAX. Not personally ready to do that.

GTIP 53.89 (Watching this international inflation sensitive ETF closely)


Update February 24, 2013

Well, it is starting to happen. Still in the green for the entire basket, but in the past 30 days, things are headed South. Closed all positions except GTIP and probably want to set some sort of trailing stop for that.

Closed ETFs include: BKLN and TIP. Closed Mutual Funds include: DODIX, FHIGX, PRFSX, USSTX. Over the next few weeks will replace these investments with Municipal bonds.

February 4, 2013

I am continuing to watch the bond fund basket closely. I closed my position in HYLD in Ts today at 50.68 so all bond funds are now in Ak basket. The two best performers for 5, 30, and 90 days are GTIP and TIP which tells me someone believes we are going to face inflation. GTIP ( global, inflation protection ) is by far the best performer. But as I was doing my research I noticed something, GTIP does not move exactly with the market. For that reason I think I want to add a bit to the position.

Decision: purchase GTIP in two tranches. Half @market, half Limit@54.50, GTIP closed at 54.76 today.

GTIP (Blue) is not highly correlated with S&P or Dow Jones

The third best performer in the basket is FHIGX. This is a municipal long bond fund. Obviously this is tax advantaged. Two ETFs similar to this are TFI and MLN. MLN is fascinating to me, it is almost as if it was leveraged, it has much bigger swings than the other equities in this basket. But the whole point of Ak basket is to be calmer than the general market.
Decision: No more changes for tonight.

January 10, 2013

Closed position on PCY while I am still ahead.

January 9, 2013

Continuing to monitor these closely. I hold four mutual funds:
Ticker     Focus     Expense   30day   90day  
DODIX    Bond A+    .4           1
FHIGX    Bond A+     .46                     1
PRFSX   Muni Int      .5
USSTX   Muni Int      .33

All 4 have dropped over the past 30 days. In particular I am concerned about FHIGX, I added to this position April 9, 2012 and it is my largest mutual fund holding. I am up 9.81%, but that could erode quickly. If I do liquidate, two portfolio candidates when the time is right are FTABX and MLN. Here are similar mutual funds with a tax free municipal focus to FHIGX:

Ticker     Expense   30 90 180 365 5yr
FHIBX       .46          1                      3
FTABX      .25          2   1     1    1    2
VWLTX     .20                2    2     2
ACLVX      .48                      2          1

January 4, 2013

This is starting to look very hard to solve. At some point in the future interest rates will go up. When that happens bonds and bond funds will be under pressure. That point is not tomorrow, but apparently that fact is beginning to put pressure on bond funds. My thesis is this is not a really good place to be right now.

Worse, bond prices are sucky right now. So as bond funds add additional funds they tend to perform worse because their bonds perform worse. No action today, but need to review everywhere I hold bond funds. They are mostly in basket Ak, but there is another one, MWTRX, in the As basket. This is being used for sector and international ETFs, so I am going to sell it partly because I am afraid I will not watch it properly and partly because I would like to tidy up the basket.

Some trading ideas from my research, all 4 star Morningstar:

• BABS, based on build America funds so it is taxable, seems to have a few things going for it.
• MLN, long municipals
• SMB, short municipals

Decision: close position on MWTRX in basket As. Use that money to buy a short term municipal bond. Monitor basket Ak closely and look for opportunities to buy short term municipal bonds and begin to close most positions. Two to think about keeping are TIP and GTIP, if interest rates are going to go up, they may do well, though a Forbes blog suggests TIP is now in an oversold condition.

Now, how to get back into the game when the time is right. Probably the best idea is to look for a newly minted closed end fund. Ideally, I could be one of the preferreds ( when they create a closed end fund there is an IPO and it would be ideal to buy in at that point).

What about the limit on JNK in Ak? I think I will leave it and simply make it more aggressive 50 JNK Limit@40.00.

January 3, 2013


Decision close position on MBDFX, think about a replacement ETF. Candidates to replace include MBB, LAG, IEI, SHY, TLH, BSV. There is no clear winner here, but plenty of losers, it may be time to move to cash in this asset class for a while. Continuing to search, XMPT, IGU, HYMB, UJB. UJB is up over 20% for the year and IGU has not been doing so poorly either.
NOTE: I hold LAG

UJB is a leveraged ETF, those make it hard to sleep at night. It's gross expense ratio is 3.02%, net is .95% so it is rather expensive. It closed on 1/3/2013 at 51.47. If I do it I will buy on a dip and only hold a small position.

IGU is also leveraged with a similar expense ratio. It closed on 1/3/2013 at 55.45. Uggg.

So, we keep researching. This is real money at stake. What about lower rated, higher yield, higher risk based assets?

HYG            3
JNK     2     1     1     1
PHB                         2
HYS     1     2           3
BSJU

JNK has a .4% net expense, 12 billion in assets, it is sort of an index fund. 

Decision: close position on LAG, we have a microscopic loss. Open a limit order position on JNK, 50@40.50.

This will have the Ak basket with the following:
JNK ( if limit hits)
BKLN
PCY
GTIP
TIP

DODIX
FHIGX
PRFSX
USSTX

And entirely too much money sitting on the sidelines, but best I can do right now.

December 22, 2012
              30    90    180   365
AGG       5      5      5      5
BKLN     2      4      3      4
PCY        3      2      1      1
GTIP       1      1      2      2
TIP         4       3      4      3

• iShares Barclays Aggregate Bond Fund ETF (AGG) is negative for 30 day period and is now negative overall. It is the lowest performer of the ETFs in this basket.  Decision, sell and look for replacement. Candidates include: BND, LAG, BIV, VMBS, LAG seems to be the most consistent. Decision, open a small position, 50@market. Put on Google Calendar to review. 
• iShares Global Inflation-Linked Bond Fund (GTIP) is the best performer over 30 and 90 days, Decision, let's add to the position 25 shares@market.
• Update January 1, 2013 GTIP is still the best performer and with the House of Representatives not accepting the Fiscal Cliff deal, the odds are the market will go down, let's add 25 shares with a limit of 53.5
• Why market instead of limit; these are bond funds, they tend to be fairly steady state, at least that is what I am hoping.

MUTUAL FUNDS:

              30    90    180   365

DODIX    3      5      1

FHIGX    5      1      2

MBDFX   1      2      1

PRFSX    4      4      5

USSTX    2      3      4

VIPSX     6      6      6

• Closing position on VIPSX
• Reducing postion on PRFSX, but want to keep some skin in the game to monitor
• Increasing position on MBDFX

Update: January 1, 2013, it may be time to reduce exposure to bond funds, they are only up because people have been looking for safety. I will think about this over dinner. In the past 30 days, MBDFX has dropped 2% which is a lot for a bond fund.

Ek CDs and some energy

I am not an expert investor. This blog is my trading notebook for myself and close family, though you are welcome to any of the information. Please do your own research and make your own decisions.

Thesis for basket Ek 4/20/13

There is an old rule of thumb that you take your age, subtract it from 100 and that is the percent of your invested portfolio (not including home) that should be in stocks. As people are living longer, that is being questioned and many experts are suggesting to have a higher percentage in stocks to prevent outliving your money.

The flaw with this of course is that it is possible to lose a lot of money in the stock market. As I am approaching retirement I am increasing the hedge ever so slightly.  To the best of my understanding CDs are pretty safe. Also, in a pinch, CDs purchased from a brokerage can be resold, but probably not at a profit under current interest rate conditions.

CUSIP Matures Interest
G99  10/11/13 0.55%
YW0   2/3/14  0.85%
5D0   3/23/15  0.95%

G73  10/13/15 1.15%

RE8   3/23/16  2.50%

5/19/15 Another CD has expired. Put an order in for 30 University Tex Univ Revs. Yield 1.141 Matures 08/15/2018. BTW, SYMX went up 8% today, who knows, that may get above water yet.

5/5/14 I took the cash from the CD that expired and moved it into small positions for municipals. This online broker had a good supply of munis that come due in 2015. The yield is dreck++, but it parks the money for a short time, earns a dollar or two in interest and is tax advantaged. Obviously I need to think about the longer term strategy for this basket.

3/11/14, I am not really happy with my strategy or execution, the biggest CD expired 45 days ago an reverted to cash, doing nothing. Need to rethink this some.

NOTE: from an earlier strategy there are two energy "orphans" in this basket:
VDE
4/20/13 106.84
SYMX
4/2013 1.04

Ts - Red Green 2013

Note: I am not an expert in investing, but if any of my work helps spark ideas, you are welcome to them. Strongly suggest you do your own research, this is real money we are talking about.

This is going to be the last post for basket Ts in 2013.  I tried to emulate an actively managed mutual fund. During 2014, my plan is to consolidate, reduce the number of positions, then when the inevitable  pull back happens have some cash ready to increase some of the strongest positions. Needless to say, past performance is not a guarantee of future performance, but it is certainly an indicator.

There is nothing magic about the red green process, but over time it has allowed me to spot and take advantage of trends. Be careful, this is only about trying to spot trends, I bought these equities at different times, so this is not an apples to apples comparison.

I have to do some analysis before the year ends to see if I should sell some losers. This blog post serves as my digital trading notebook. I will read it top to bottom today, do some additional research and make the best decisions I am capable of. I need to dump enough losers to offset the dividend payments the account has received.

12/12/13 Highest performing losers(reds) - high to low
                  30  90  180 1yr  5yr
MCD         -     -      -     3    4
GES          -    3      3     2    3
LECO      -     2      1     1    1
LF             -    -      -      5    2
TEVA      -     1     2     4    -

Decision: I think I have egg on my face with Leap Frog (LF), going to close the position to prevent further losses. Market sell, 90 shares, last close 8.10, my loss will be about $22.95 + two trade fees.
Opportunity: Lincoln Electric isn't likely to stay in the red, but it doesn't count as a value play either. Do some more research and set a trade alert in case it drops.

Next tranche of losers
                  30  90  180 1yr  5yr
ISRG          -    -      -     -      2
CTXS        1    -      2    -      3
RDWR      3    1      1   2      1
CORR       4    3      -    1      5
COH         2    2      -    -       4

Decision: hold on to, possibly increase the position in Radware (RDWR) especially if there is a pull back. So why is it down? Depending on when one bought it it might even be an up (green). I bought it 6/27/12 and it was at a bit of a high. This shows, I hope, why red greens are NOT decision makers, but sometimes help me spot trends.

Lowest winners better to lower
                  30  90  180 1yr  5yr
HURC       2    -     -      3     2
PANW       -    1    1      4    5
MELI         -    -     -       1    1
SSL           -    -     2       2    3
SLV          -    -     3       -    4

Analysis: Keep in mind this is relative, most of these are going to bounce around up and down, relative to each other. To have an absolute evaluation, one needs to focus only on that equity, but I find one of them a bit interesting and that is Pao Alto (PANW). I am familiar with the technology as well and they were early to the Next Generation firewall party. They have some patents, but I do not think they constitute a "moat" to keep others out of the field, in fact, I think Fortinet was earlier to market. PANW's track record isn't very long, I think their IPO was July 2012. Here is their chart, the $60,000 question is can they keep th current spike going.

12/4/13 Leap Frog (LF). This is a maker of educational tablets for children. I am always nervous about buying an equity I do not understand, but I have a relative with two small children and have seen them play with the gadget. Limit 90@8.30, last close was 8.44.

12/2/13 BSX, overall I like the company. The debt to assets is a bit higher than I like to see, I favor a ratio of less than 20, but inflation seems to be a distant concern, raising money should not be hard. I already have this position, but cautiously seek to add to it. Limit, 50@11.00 last close was 11.58. It is unlikely this will hit, this is the 3rd best performing equity in my mutual fund, but que sera sera.

The lowest performing greens in the fund in order of best to worst are SYZN, HURC, SSL, SLV. TILE AND MCD. Though I crave McDonald's cheese burgers w/o onions, love the way they are integrating into stores like Wal-Mart, see they are working hard on their menu, (if you have not tried the Bacon quarter pounder you owe it to yourself). I just cannot put another dollar in that equity; considering performance, I am overweight. Of the rest Sasol, SSL, seems to be the most interesting. They have had a great year. However, I have a lot of exposure to energy. Decided on a half hearted limit, 15@49.35 last close was 49.54.

11/30/13 Top performing reds in the fund. Best to least performing.
                  30  90  180 1yr  5yr
ISRG          -     -    -     -      4
TEVA        -    4    3     3      -
LECO        3    2    1     1      3
COH          1    3    -     -       2
RDWR       2    1    2    2      1

Think I need a calendar alert for ISRG in about two weeks this used to be a profitable stock for me, but it is clearly headed in the wrong direction. Or maybe just pull the plug. RDWR on the other hand seems like it will reach positive territory. Let's try a limit to add to our position, 30@16.

Coach (COH). There are a number of reasons why this might be a good buy, strong brand, doing well outside of the US, especially in China. However, there might be some good reasons NOT to buy as well, tepid US sales, a drift away from the original brand concept of really strong and durable purses, and a new art director, ( which could prove to be good or bad). And sales of luxury items are drifting down in China.
Decision: Deep limit, 30@54, last close was 57.90.

11/30/13 Did a lot of research into Extendicare (EXETF). Care of older folks in Canada and the US has to be a growing trend over the next 20 years though the margins may get interesting in the wrong way. Instead of a limit order, I set a calendar alert and will see how they are doing in 2014.

Also, decided to close my position on Riverbed (RVBD). We are going to get thumped this tax year and a few losses can help reduce the pain. 200@Market, 20% loss.

11/29/13 The market is only open till 1 PM today, so setting up some trades:
I have decided to harvest a loss with National Presto, NPK, they make bullets and mostly sell to DoD which is not a great place to be right now. 30@Market, but can use the loss to help offset the tax burden from the dividends.

Considering opening a position with Catamaran, CTRX. They may be positioned to compete with Express Scripts, which I hold and is doing well. The thesis is simple, some piece of Obamacare is bound to survive even if the next President is a Republican. They have gone far down the road and it will be difficult to unravel a lot of it. Catamaran's business model might let them take a bit of market share from Express in the health exchanges if things go their way. I went for a limit 30@45.00, last close was 45.55, it is not an aggressive limit, I just need some famous analyst to report that black Friday did not meet target or some such and the Wall Street computers will start to sell everything but the kitchen sink.

11/23/13 The mutual fund is doing well, but heck it is a bull market, right now is a bit like fishing in a stocked pond with wiggily worms. The scariest positive is MELI, I am up 12%, and I am confident of the long term, but have to wonder about profit taking, long past the one year capital gains hit. Added about $1500, (from dividend payouts, when possible you want to create a compounding machine), to positions in:
LECO 72.22
SZYM  8.20
Both were market purchases, I am a big fan of limit, but in a bull market you have to run with the bulls.

Update March 29, 2013
1) Limit orders that perhaps should be market
Here are all the limit orders:
                  5    30  90  180 1yr  5yr
FTNT         -     -    2     -     -     1
CHEOY     -     -     -     3     1    4
QCOM      1     2    3    1      3    3
RDWR      -     1    1     2      2    2

CTXS       -     4     2    -       -     2
BRCM      3    5     4    -       -     3
NOV        2    3     5    -       -      5
INTU       1    2     3    2       2     1
TILE        -    1     1    1       1     4
Lets compare the strongest performers:

QCOM   1     3    4     3       4      3
RDWR   -     2    2     4       3      1
INTU     2    4    3     2        2      2
TILE      -    1    1     1        1      4

Decision: 35 TILE@Market to open position, look for a drop to add more, 15 RDWR@Market, Accumulate, 50 INTU@MARKET to open position, keep limit on CTXS@ to open position, cancel FTNT do not open position, watch CHEOY closely

2) Westport Innovations. Kathy is going to invest about $1k in CLNE in her MLk basket. I hold WPRT in Ts. So, she is investing in natural gas fill up stations coast to coast in the US and I am investing in the intellectual property holder of the ways to build the engines. Long shots, but added 25@Market to my position.

Update March 27, 2013
1) Red/Green lesson learned. Need to start using longer timelines. Starting now, I think I should start to factor in 5 years when possible.

Reds             5    30  90  180 1yr  5yr
TEVA   -     2    4     -     -      -     -
ERIE    -     3    3      1    1     -     2
IBKR   -      4    2     2    2      -     -
SSL     2      5    5     3    3      -     -
NPK    1      1    1     -    -       1    1

Decision: Stay the course

Update March 25, 2013
1) LQDT, Liquidity Services was a candidate for the ecommerce basket, but as I was doing my homework, it really had me scratching my head. Analysts tended to love it or hate it and a considerable number hate it. But it is interesting enough to me to open a small position in the mutual fund and watch it closely and keep learning more about the company. Decision: Limit 35 @28.75, it closed today at 29.35.

My thesis is this company has the potential to be the information broker for surplus goods. They have worked with eBAY and I have to guess one of the case studies is either Dell or HP.

Update March 22, 2013
1) CHEOY, my limit for 20 shares hit; therefore it took a dive. When I look for stock news, I am not seeing anything so far, when I look for news it is all positive including a heartwarming video of a mom hearing her son's voice for the first time. This is one of the great things about being an investor. Not sure what I am missing. Probably nothing, maybe just did not set a deep enough limit.
3/1/13 36.17
3/22/13 34.96

CHEOY is most definitely a green so lets check performance of the two above and below, best to least performing.
3/27/13                             5   30
              5       30      90
HURC                       1          3
WFC      2         2       2         1
CHEOY 3         3              2   4
FDX                          4
GSK     1          1       3     1   2

No immediate crisis on CHEOY.  Fed Ex is off a bit, but they are not going anywhere and like UPS FDX stands to continue to make money from a failing post office. However HURC is a bit troubling. CHEOY does not appear to be followed by analysts, so this may be a company to invest a bit more in.

3/27/13 I am still holding pat on Feb Ex, but very aware it has lost over 7% in 30 days.

2) HURC Let's take a closer look.
1/22/13 29.02
2/22/13 29.06
3/22/13 27.10
3/27/13 27.08

It does have a beta of 1.57 and it bounces around. They did have a lower first quarter compared to 2012, largely because a big part of their market is Europe. We are past the one year point for any purchase of this stock so we can profit take at any time. No action right now, but want to watch this one closely.

Update March 18, 2013
1) The market is insane, but not to complain, everyone likes a roller coaster. While I was teaching in Orlando, it set records for back to back highs. Today, is a little bit choppy. Forget firing bullets instead of cannonballs, today is a BB day. If I do anything at all, it will be surgical.

2) Open orders:

3) Best performing Greens in order (does not include penny stock TSRYY):
3/27/13                              5   30
               5       30      90
Z            1        1        1     1    1
PRAA     2        2        2     3   2
DIS         -        3        5          4
GS          -       -          4     -   -
FB          -       -          -     -   -
OII         3       4         3     2    3

Could it be time to head to the exits with Facebook?
3/27/13 Decision: profit take with GS and FB


4) Lowest performing Greens, high to low:
3/27/13                              5    30
               5       30      90
GSK        2        -        4    1     3
MCD       -        1        1    -     1
RGS        3        -        3    -     2
PANW    4        2        2   2     4
WFM      1        -         -   3     -

3/27/13 No action at this time

5) GS, as it says on the open orders, I put in a limit for 5 shares of GS@146.50

Update March 7, 2013
1) Open orders:

2) Reds looking for climbing activity:
3/27/13                      5   30
               5   30   90
RGS                     3   -     -
BCPC      1     1    1   1    1
RDWR    3     2    2   -     2
TDC                         -     -
SLAB                      -      -
TEVA    2    3
Decision: 25 BCPC @Market see screenshot above, 25 RDWR@Market.  Keep a close eye on TEVA.
Decision: sell 75 RGS, 90 TDC, 65 SLAB


Update March 1, 2013
1) Open orders:

2) What's up SUP?
Nope, not Stand Up Paddle Boards though we have those in two states, this is Superior Industries, the aluminum wheel maker. They just got creamed after earnings.
Decision: 25@Market last closed 19.54

3) Ireland Bank
I made a small bet on this equity, it has done well for me, but it keeps dropping this month and there is not chance I will ever really understand it. Closing position, 350 shares@7.62.

Update February 24, 2013
1) Open orders:
BRCM 20@31.39 last close 34.53
INTU 50@54.82 last close 62.78
RDWR 15@ 35.50 last close 36.90

2) Three tranches of negative equities in the basket. From least negative to most negative.
               5    30   90
MCD       3    2     3
SLAB      -    3     4
GTI         -    -      -
MELI      2   -      1
RDWR    1    1    2
Decision: close position on GTI to preserve capital, this will be a 2% loss. RDWR 15@35.50 GTC.
3/1/13 GTI is now down 28.9 percent for past 30 days.
4/27/13 GTI 7.06 down 30% over past 90, -5.4 past 30 days

3) The second tranche is even further down, so we need to be careful and really think this through.
              5      30     90    180   365
IBKR     -        1      -        2       -
ERIE     -        3      2        1       -
SSL       -        4      3        4       -
CHKP   1        2      1        3       -
HAIN    -        -       -        -       1
TEVA   -        5      -         -       -
Decision: close HAIN and TEVA. Purchase 10 CHKP Market@52.23.
3/1/13 CHKP 51.83 up 1.68% past 30 days, hard to say how this is doing.

3) The third tranche would be the lowest performing equities in the basket. I should tread very carefully here.
                     3/1/13    5  30
               5    30   90
GES        4     1    5
BCPC     3     3    3     2    1
RAVN    1     4    2           3
SQM      -      -    -
IRBT     5      -    4     1
WPRT   2      2    1           2
Decision: close SQM. Buy WPRT
3/1/13 WPRT 28.28 down 2% on the day, up 5% on the past 30, this stock has a beta of 1.91, so there will be some tummy churning moments. Let's set a Google Alert on IRBT, I so very much want this stock to succeed.

4) These are the lowest performing equities that are green ( positive ) in the basket.
               5    30   90
GSK        -     3     3
NTGR     -     -      -
BRCM    1     2     1
NOV       -     -      -
TDC       3     -      4
WFC      2      1     2
Decision: Close NTGR Market, it is falling fast. Last close was 33.70. Other than that, hold and wait on the rest.
4/27/13 NTGR 28.82 down 28% over last 90 days

5) Greens with the biggest dips on Friday
4/27/13                           30  90 1 yr%
               1   5    30   90
Z             3   1     1     1   2   1    58
ESRX      1   3     2     3   -    3    3.4
ALV        2   2     3     2   1   2    15
Decision: No action required


6) New candidates to be added to basket. All of these candidates appear to be well run companies with low debt. I have experience with Fortinet (FTNT), Pao Alto (PANW) and Whole Foods ( WFM). I can't say I play Leap Frog (LF), but have seen kids with them. CRUS is a major supplier for Apple (AAPL), to by this stock is to believe Apple will go back up.
              5      30     90    180   365
WFM     -        -       -       -        4
CRUS    -        -       -       -        2
PANW   1       2      3       -        3
FTNT     1       1     1     -1         -
LF          -       -      2       -         1

Not exactly awe inspiring. But I do want to keep an eye on these, especially Whole Foods, they are not carrying as much debt as most other grocers an in conjunction with Costco and Wal-Mart could be poised to take market share away from the competition.
Decision: PANW 15 Limit@55.00, FTNT 30 Limit@23.50.

February 4, 2013
Sold 100 LRN - Thesis, it is still in the green, but suspect the pressure on proprietary institutions will make it a bit choppy. Closed today at 18.53
2/24/13 21.81
3/1/13  20.83 Phoenix University Accreditor reccomends probation, this will probably impact most proprietary institutions.
4/27/13 25.21 When am I going to learn to slow the heck down?

Sold 95 HYLD - Thesis, time to reduce exposure to bond funds, better to actually own the bonds. Closed today at 50.68
2/24/13 50.87
3/1/13  50.92 Making progress at buying bonds in basket Ak, keeping them short, looking for better opportunities in 2015 and 2016.

Open limits from previous analysis:
Ticker      Limit     Last Close    Action, if any
INTU      54.83       62.09      
JCI          30.0         30.83
BSX        5.00           7.45         Change from limit to market
FDX       89.00         103.39      Cancel, this bus has left the station
BRCM    31.5          32.45
ALV       59.00        65.01         Strongly considering a modest market buy


Five lowest % that are positive in the account, lowest to highest 2/4/2013
2/24/13   5   30
BRCM   1    2
SLAB    -    3
IDX       2   1
OTEX   -    -
GTI      -     -

IDX has performed the best in the past 30 days, but I am overweight both on this ETF and Indonesia in general so passed on adding.  SLAB has performed second best for 30 days and 90 days. Decision: Buy 15 SLAB Limit@43.23.
2/24/13 42.27
3/1/13   31.09 Ouch!
4/27/13 39.32

Five highest % that are negative in the account, highest to lowest
Ticker      5    30   90   180
RGS        1                   2
MELI             2      2
MCD       2     1            2 (tie)
HAIN
JCI                       1       1 (25% increase in past 6 months)

How about these tea leaves, how do you choose? I will certainly watch these closely.
JCI profit is down, and their debt is close to my 20% limit. Decision: close the position and lock in a small loss before it becomes a big loss. Last close was 30.83.
Decision: take no more action tonight, set a Google calendar event to revisit the remaining 4 equities in ten days.

The US Patent 100

In the course I author and sometimes teach, SANS MGT 512 Security Leadership Essentials, we have an intellectual property section. I tell people that one of my investing strategies is to bet on companies that engage in R&D and that a good proxy for that is the number of patent applications filed per year.

To be honest I have felt a little like a lone wolf in the wilderness. But tonight I learned about the US Patent 100 from a newsletter called Wall Street Daily. It appears to be the work of one guy, (Louis Basenese) and I am sure he is off sometimes, everyone is, but I find his writing style enjoyable ( stocks, after all, are rather boring, so it is nice to see someone spice it up). And I have only read one issue of his newsletter, but I have to say I agree with the majority of what he wrote.

Back to the US Patent 100, I Googled it.  This is a joint venture of MDB Capital Group ( the investment bank that tracks IP ) and IAM, the intellectual property magazine. Here are the top five ( no surprise):

• Samsung
• IBM
• Canon
• Panasonic
• Sony

I hold IBM and Canon and have an ETF that has Samsung as its largest holding ( I do not really want to trade on the London Stock Exchange just to hold Samsung). I guess I need to look into Panasonic and Sony.

Watch List (looking for a pull back to pick these up)

Stocks in rank order for my desire to add to portfolio and price points

(Last update March 10, 2013)
Summary: As the DOW is setting records, the doomsayers are predicting the end of the world as we know it. And they may even be right, but I want to think my priorities through carefully.

Increase small caps ETFs VBR and SCHA on a significant drop in basket Cs. This strategy is defined here.

Wal-Mart (WMT) currently 72.02, one of my regrets for the 2012 trading year was dumping my large WMT position in basket Es, but I had to because of the rules of the basket. I have a small position in basket Sk. The 20% drop would be 57.60. If it drops to 50, I think I would try to take it to core stock status.
12/17/12 69.20

3/1/13     71.74
4/2/13     76.02  Here is a pretty negative article though:
http://www.bloomberg.com/news/2013-03-26/customers-flee-wal-mart-empty-shelves-for-target-costco.html

Amazon (AMZN) I think this is one of the best opportunity companies on planet earth for the next few years. It last traded for 252.05 and its 52 week low was 166.97. A 20% drop would be 201. Anything below 170 is interesting, anything below 150 would rock my world. I hold a significant position in basket Sk, but at the right price would like to add.

3/1/13 265.74

3/22/13 257.75

Intuit (INTU) last closed at 61.44 with a P/E of 25. Decision, extremely deep limit 50 shares@55, probably will not hit, but if it does, we have opened this position in basket Ts.
12/31/12 59.48
1/4/13 62.22, up 4% for the past 30 days.
3/1/13 65.04, going to take a miracle for this to dip to my buy around range

Whole Foods Market (WFM) added to watch list 3/1/13. This is one of my three favorite grocery stores,  (the privately held Wegmans and Trader Joes are the other two). I have just set a Google Alert and will begin to study it. Since it is trading closer to its 52 week low than high, I am thinking about opening a small position in Ts so I look at it a lot. Let's see what research we can find:
Finance.yahoo.com has a 1 yr expectation of 103.15 and it is a Cramer pick
Ameritrade's analysts are neutral to poor
Schwab rates it a C, their analysts are neutral
Etrade analysts tend to be negative
Motley Fool CAPS is 4 out of 5 stars
Decision: I will do a better job tracking this stock if I own 10 shares of it in the mutual fund, limit@85.25
3/1/13 85.79
3/8/13 85.00

General Mills GIS) is in basket Ck (dividend). 3/30/13 they are increasing their dividend and will probably do better in a downturn than weaker stocks. P/E is fair 18.19, but debt is higher than I like to see. Expect this to be a fairly stable plodder. Buy around 38.00.
3/30/13 49.31

Disney (DIS) is up over 30% for the year. I hold this in my Ts mutual fund, it last closed at 49.66, to add to the position, I would want to see a price point of 70%, 34.66. And don't forget the Star Wars movie.

12/17/12 49.28

3/1/13     55.33

Biogen Idec (BIIB) has just had their Multiple Sclerosis oral pill approved. This will likely be the most prescribed treatment for MS. The stock is very pricey right now. Buy around 120.00.

Starbucks (SBUX), this only makes sens if there is a significant drop. Last closed at 51.84, 80% would be 41.47. Their loyalty program appears to be working, 86% growth in subscribers and they seem to be making progress at becoming a so called "third place" something other than home or office. They are also doing well internationally.


In January 2013 the news was abuzz about Starbucks legal tax minimization strategy in the UK.

The opportunity for them to really win is in the food. I read once that one third of purchases in the US at Starbucks include a food item. As we see MacDonalds continue to struggle at least for now it is far more likely for Starbucks to  intrude on MacDonalds food sales than MacDonalds McCafe to impact Starbucks coffee sales.

12/17/12 54.58

3/1/13    54.87
3/22/13  57.38

Panera (PNRA), is a stock I sold this year to lock in profits, it is currently richly valued. More analysis can be found here. Last trade 160.5, 80% 128.40.

12/17/12 160.52

3/1/12     160.50

Chipotle (CMG) is a stock I sold to lock in profits, it is currently richly valued, but slowly drifting down. It closed today at 263.75 and my fiscal cliff buy around is 210.80.

12/17/12 286.68

3/1/13     319.74

MSC Industrial Supply (MSM), they have the logistics figured out so their customers do not have to hold onto inventory. Wonderful company and a candidate for the Sk basket, bit overpriced need a dip.
1/22/13 87.79

Williams and Sonoma WSM. Strong leadership, dividend payer and intentionally trying to move more into an online store ( though there is no substitute for walking through a cooking store). They also are Pottery Barn, I must confess I have never been in a Pottery Barn. Maybe next time I am in Richmond.
3/22/13 49.83

Movado, (MOV) I made some serious cash on this watchmaker and locked my profits into a CD. Last closed at 34.69 and 60% would be 20.81.

12/17/12 31.34

3/1/12     36.40

3D printing is an overpriced asset class. SSYS last 74.95 70% is 52.46, DDD 70% 31.30, but it has high debt to asset ratio so SSYS is probably wiser.
SSYS 3/22/13 74.80
DASTY, a Euro company is up 42% for the year, at 50% I would buy at 56.88. Proto Labs (PRLB) is smaller and they are up 24% for the year, they last closed at 36.00 and 80% is 28.8. And to drive these printers you would need Autocad, ADSK at 80% is 26.50. NOTE: I have lost money with ADSK in the past so this needs to really drop to encourage me to buy it.

ADSK 3/1/13 37.36
3/22/13 41.39

 IPG Photonics (IPGP) in the Es basket has been a good stock to own, but it is richly valued. It last closed at 59.10 so 70% of that would be 41.37.

12/1712 62.48

3/1/13    60.11 (better set a Google alert and keep a close eye)

Celgene (CELG) is the Ritalin company, they also have a number of cancer fighters. Adding to watch list 3/1/13 105.62
3/8/13 111.36

 HSBC has been on a tear all year despite everything we read about Europe. Last traded at 51.10, I would be scared even at 80%, but 70% puts me at 35.77 for this dividend payer.

12/1712 52.13

3/1/13    54.83

Wabtec (WAB) produces about half of all the rail brakes and safety products in the US. They are a bit overpriced, their debt is close to the upper limit I will tolerate in a stock and they are very volatile. This certainly would add diversity to the portfolio. But at the right price: the last close was 84.62 and 70% is 59.23.
3/1/13 97.72

 Polaris (PII) don't make a big bet, but an off road vehicle maker would add some diversity to the mutual fund. Last trade was 84.81, 20% drop would put me in the 67 range. They compete with Arctic Cat, (ACAT) up 90% for the year, anything below 15 would be a sensible buy.

3/1/13 86.77

 Philips 66 (PSX) is a refiner. It has been on a tear all year and this dividend payer is richly valued. Now that is a bit of a risky investment even though we all know people are going to need gas. The economic success depends on external factors. Last close was 52.37 and 70% is 36.66.

3/1/13 63.90

Interesting ETFs

MOO is the largest agriculture ETF and is up for the year despite the drought. Last trade was 52.17 and 80% yields 41.73.

12/17/12 53.12

3/1/13     54.13

PUW is a progressive energy ETF. They do renewables and making gas from natural gas and such. 19.68 would be the buy point. Keep this as a small buy, and long term hold, renewable energy has struggled, but should eventually work.

12/17/12 25.00

3/1/13     27.08

VIS, Vanguard Industrials is an industry sector ETF. Therefore it will be cyclical. The best way to make money is add to your position on the bigger dips and reduce it a bit as it starts to peak. It is up 12% for the year, but it is also fairly volatile, so if there is fiscal cliff churn an 80% might hit fairly early in the game. It last traded at 70.50 and 80% if you want to execute early in the churn is 56.40 and 70% is 49.35.

12/17/12 72.09
3/1/13     77.23

WOOD is a timber ETF, I think the expense ratio is about .48. It is up 15% for the year, but has paid a decent dividend, though their track record is not like clockwork. It last closed at 42.73, 80% yields 29.9.

12/17/12 43.61

3/1/13     48.38

December 1, 2012 Fiscal Cliff Thesis

Update 3/1/13 We are still in an overall bull market, we just fell off another fiscal cliff and nobody but President Obama and Ben Bernanke seemed to panic. I am very glad I did some profit taking and that money is locked into short term CDs. In the future I think I will lock in Municipals to try to reduce tax exposure.

12/1/12
Well it is looking more and more like we are going to fall off the fiscal cliff. My thesis is this will start to freak some investors out and we could see some price drops in the next few weeks. That is of course, the time to buy, but what are the best companies to buy? Probably companies that have gotten too pricey right now to add to the position.

• Update December 17, 2012, so far we have enjoyed an overall up market since I first wrote this and that is a beautiful thing. I have zero sellers remorse over the five incredibly well performing equities I sold in Step 1, I refuse to attempt to time the market, just give me my 20% increase or better and I am a happy chappy.
• Update December 22. 2012, on Monday I will be closing my positions in the Ts basket (mutual fund) in: KAI, AMZN ( still have a position in Sk), CMC, BMC, DLB and PCAR. This is pure profit taking with an intent to purchase CDs.

Step 1, I want to profit take on some of the best performing equities in the Ts mutual fund. On December 3, the following market orders should execute.


RAX Last@ 69.12 12/22/12 72.86
ISRG 529.00 12/22/12 496.76
MA 488.68 12/22/12 493.57
ROIC 12.69
WSM 45.26 12/22/12 43.45

UPDATE: December 3, 2012, The orders did execute and I am cash heavy in Ts, but I am comfortable. I like the idea of keeping some powder dry before we find out about the fiscal cliff. I am VERY glad to have unloaded ROIC at a profit. I did my homework before picking it up, but I missed the whole thing about 41 million in warrants (essentially long term options designed to expire October 23, 2014). This equity is too marvelous to me and I doubt I will pick it back up.


Step 2, Keeping in mind the WASH rule, I should not add any of the above list back until January 4, 2013. That said, they are all great companies and I believe in their business models, so at the appropriate time and at the appropriate price I would be tempted to add them back.

Step 3, For the next few weeks, I need to start working on a list of other stocks/ETFs/mutual funds where I would like to go shopping. I think one good place to add new money is in basket Sk. Online retail is only going in one direction, up, up and away. However, any and every stock/ETF/Mutual Fund that you have designated as core to your portfolio ( you are heavy in this position) deserves a chance to have the position increased at the right price. Finally any equity that I closed in the Ts basket to profit take may be a good choice for reopening the position. They are companies I know and have researched so adding them back could make sense.