Saturday, December 30, 2017

Retail Kroger

We are clearly going to buy a lot of groceries from Walmart and probably Amazon will get a chunk of that money. What about Kroger? One concern I have is their debt, they added it before really trying to get strategic and build white space between them and the other two companies:

Some of that was to buy Roundy's, purchase or compete. But that still leaves Walmart and their fleet of stores.

There is the new Kroger Marketplace format which resembles a Wegman's:

But they can only deploy so many of these and they already had Fred Meyer which is similar:

Here is a guy that thinks they are undervalued:

I think I will pass on Kroger!

Tuesday, December 26, 2017

Retail landscape

Initial discussion is:

Jim sent this link:
"Total retail sales this holiday season added up to a record $598 billion dollars — up $33 billion from last year."

Efficient market suggests all that will be priced in when earnings are reported in 2018. There will be no surprises. Now is the time to look ahead. Which retailers will prosper in 2018 and under which situations?

We live in good times, long bull market feeling of prosperity, willingness to open the wallet. That leads to debt:
"previous record in April 2008, when consumers had a collective $1.02 trillion in outstanding credit revolving credit."

The clear winner there is Visa, doubled over last year, no reason to think they will slip. Plus there is the trend to cashless, "freedom from carrying cash":

Use cases:
1) Good times continue to roll, people buy STUFF
2) Stock market falters, but no recession, stock buying opportunity
3) Recession

Macro forces:
= Household disposable income
= Household debt
= Items people need, (toilet paper)

= Items people want, (sports cars)

Sunday, December 24, 2017

Retail - Stephen Northcutt and Jim Manico

My friend Jim and I are starting to review the retail segment of our portfolio's for 2018. This is just a chance to keep some notes.

ACTION: Jim has a limit for WMT, I have one for CVS.
I started with an off the top of my bead list 12/21/17:

Stephens list

And asked Jim for his thoughts about best and worst, below:
NOTES: 12/24/17: 
- I plan to limit to 4 retail stocks, AMNZ, WMT, CVS, (limit buy in place), ???? who should #4 be?
- I hold Walmart and feel it should be a core holding. I have an aggressive limit in place to buy more
- Jim makes a good point with CVS, I have set a gentle limit to pick some up. 
- I looked into Trader Joe, they were private back then, I think they still are
- Been watching KR for a year, just does not move me

Jim's take:
WalMart - If they learn to pay for top quality tech talent they could give Amazon a run for it's money. I do not think it's likely. They are cheap bastards and cannot keep top talent. That's going to keep them down I think. Their stock is at an all time high. 
Costso  - I also took short gains here before they rose another 16%. I need to learn patience. This is just a marvelous company.
The Home Depot
CVS - VERY interesting buy as they get into health insurance
Safeway - Always was fond of this brand, but that might be because I'm always hungry
Best Buy
McDonalds - They have gotten their act together changing with the times. I'm a fan (of their business, not their food)
Rite Aid
YUM Brands
Albertsons - expensive and wonderful
Dollar General
Ace Hardware
BJ's Wholesale
JC Penny - Dead company walking
Bed Bath and Beyond
Trader Joes - Love these folks even though they are just masters of illusion
Wendys - they seem to be losing out long term even if their marketing is just amazing
Burger King - Great marketing
Dunkin Donuts

Three Best:
Ross - In hyper growth mode, a well loved consumer brand at all economic levels, and can compete with Amazon
Apple - Their P/E is shamefully low and if you compare them to other FANG's (or any other company, period) they have 40% growth potential. I still might take my winnings for the year, which are big, but I'm likely to have sellers remorse. Analysts are very thumbs down on Tim, but service revenue is way up and everything the do is flying off the shelves.
Costco - Sales up 10% from last year in the same quarter. Pro employee and pro consumer brand. I just love how the run their company.Their foot traffic is 4X that is walmart and target. eCommerce sales rose 40+% while at the same time growing foot traffic. Unprecedented! I have sellers remorse here but might just back in like the new investor that I am. :) They can compete with Amazon on all fronts.

Five Worst:
Wendy - Very high P/E and is an "expensive brand that is in a discount sector" I do not think they will do well in the next downturn.
Sears - They could not survive that last 2 years? Dead company walking. They are not a discount brand and will not survive a downturn since they could not survive an up economy.
Walmart - Their stock is on a tear the past 2 years but I think there is lots of room to short here. They cannot get their IT act together online. They will NOT pay for top IT talent. There is no way they can compete with Amazon unless they change that.  Minor 2% sales growth over last year. Bad foot traffic growth, bad online sales growth. I don't see a lot of upside and their stock is way 
Target - 0.9% growth over last year. This is anemic. What the are doing is NOT WORKING and they will get CRUSHED in a down economy. 

I am so flooded with information that I do not know what to do. This is a blessed problem to have.



UPDATE: 2/26/17 Jim is point to place a limit to open a position in WMT. Good luck, that may be chasing an upbound elevator for this week anyway. He sent this link:
"Total retail sales this holiday season added up to a record $598 billion dollars — up $33 billion from last year."

So there are some forces that we need to explore:
= Household disposable income
= Household debt
= Items people need, (toilet paper)

= Items people want, (sports cars)

Wednesday, December 20, 2017


Summary: I think TSLA is rapidly becoming one of the Greenblatt "Stock Market Genius" poster children. If they run into cash flow problems and it causes their stock to swing down it might make sense to place a bet.

Forget model 3s and semi-trucks for a minute, did you catch this somewhat obscure post:
Slashdot: Tesla Big Battery Outsmarts Lumbering Coal Units After Loy Yang Trips (
The Tesla big battery is having a crucial impact on Australia's electricity market, far beyond the South Australia grid where it was expected to time shift a small amount of wind energy and provide network services and emergency back-up in case of a major .

We could bemoan the aging infrastructure in the US, or we can think of it as an investment opportunity. 

And a quick reminder, this was the famous Elon Musk 100 day bet, he won, and it went operational 12/1/17.

Monday, September 18, 2017

Transportation and Warehousing

8/26/17 Convergence alert, AMZN is buying up what was formerly the world's largest mall in Ohio to become a warehouse.

I was really struck by Table 1 of this Obama presidentially funded report. No matter what your politics are, the fact that consolidation in the Transportation and Warehousing and Retail Trade industries has increased over 11% from 1997 - 2012 should get our attention. Same old story, mom and pop companies edged out, a few big strong players such as AMZN and WMT in retail when the smoke clears.

But who is winning the Transportation and Warehousing world? This is not my area of expertise, but right off the bat UPS and Fedex come to mind. Walmart does their own thing, (another moat factor). Schneider is private. So, let's add Roadway, Yellow, C.H. Robinson, and Crete as a starting list on the trucking side.

I know less about warehousing then trucking.  Google, at least, seems to equate "warehouse" to "logistics", since this is just a notebook, we will go with that for the moment. This webpage claims to list the top ten and we have to start somewhere: C.H. Robinson, Echo, Transplace, Ryder, UPS, J.B. Hunt, Kenco, Penske Logistics, Unyson, Seko, Menlo, Landstar.

ACTION: setting a Google alert for C.H. Robinson and need to get on some mailing lists to understand the Transportation and Warehousing sector better.

Tuesday, August 29, 2017

A 10 year tale of three ETFs "Growth versus Value"

We are starting to see articles about it is time for value focused stocks to have their day in the sun. Hmmm. Most of my family's assets are in low overhead Vanguard ETFs to prevent a hot head like me from making some stupid rash decision.

If we look at this Google Finance chart comparing Vanguard Growth and Value, you can see over ten years Growth is the better bet, but MORE IMPORTANTLY, they are highly correlated, one goes up, the other goes up, etc.

Now just for fun, I added a 3rd ETF, a highly overhead Value, that gives Vanguard Growth, VIGAX more of a run for its money.

With the money that I have set aside for personal investing, more as a hobby than anything else, I am starting to fall into a bit of a trap. As detailed in other posts, my family did well with big plays on spectacular growth stories. We took our profits are are largely on the sidelines trying to get back in. With an 8 year bull run behind me, I am expecting some buying opportunities. My brain keeps being focused on large, safe, companies and getting them at a good price. There is nothing wrong with this strategy, except that unless I really devote a lot of time and brain power, I will simply be correlated with various ETFs and could have used the time to do other things.

How to break the code?  

1) My first temptation was to buy some RPV on a dip. Yikes, what am I NOT thinking? While it is performing very well compared to Vanguard's value, it is still massively correlated and for good reason, the top choices of the fund are in the 2% or slightly less of the total fund range. That means they do a great job of spreading risk across multiple companies, but so do all of my other ETFs. No!

2) I could go overweight with a company that appears to be undervalued and ready to ascend. That is every investor's dream. The problem with that is I only really know and understand a finite number of companies. No!

3) Try to figure out what the next macro trends are and the companies that stand to benefit. This strategy has two parts, getting in on the hype early and I think my family's successful investments in AMZN and TSLA were just that. Then we profit took and jumped out. But, the longer view of investing in, staying with, learning more about a few companies with the right business model, purchased at the right price, (WMT < 70, AMZN < 900 etc), is probably the best strategy. Some thoughts about Macro trends:
- Demise of malls, ok, people still need shoes and groceries, where will they shop?
- Overt consumerism, at some point people will wonder why they have closets full of clothes and drawers full of pocket knife, companies with really good, really useful products will be in good shape. In 2008 after the downturn there were a number of articles about consumerism is not sustainable, consumerism is dead and so forth, but while the message is muted in 2017, the numbers are there. And the link to the decline of shopping malls is clear and obvious. 
- The robotic economy.  From bricklaying to hamburger cooking, robotics are increasingly entering the workforce. Who is making them, who is selling them, who is using them, who is making money because they use them? the ETF ROBO is doing well, but has an almost 1% management fee. Buying on a dip might be a short term way to get some exposure.

Saturday, August 26, 2017

The war for retail will be won in groceries AMZN, WMT, KR, COST

8/26/17 I read that the war for retail will be won in groceries on a CNN blog so it must be true! But please forgive my twisted mind for diving deeper. The article is centered around Amazon and Whole Foods which is < 2% of the grocery market. This blog post will consider other retail than groceries, but they are a sector that begs watching.

The problem with the CNN Thesis is that groceries tend to be a defensive stock. As the Investopedia article points out, they do better in harder times, have slower growth in good times. It claims: "Despite this eat, drink or smoke perception and despite modern-day developments, tobacco shares have miraculously never disappeared or been wiped out. Not all food companies are actually defensive stocks, but a good rule is that if the bulk of the sales comes from grocery stores, the stock is probably a defensive one." 

Perhaps, but WMT, AMZN, COST, KR all did fairly well post great recession. Our family benefited from their performance. But only KR has a weak footprint in non-grocery, but they certainly have feet in that camp, (Fred Meyer is a major local presence in Washington State). So perhaps the thesis is better stated:

9/9/17 The war for retail will be won by vendors that balance consumer goods and groceries well. I think that is a more accurate thesis. It helps explain why a number of retailers and such are struggling. 


9/25/17 Seeking Alpha, "The company may well be fully valued for essentially all future growth." Grated this thesis is a bit brash, but it does help with perspective.

Here are some more stories, I am guessing this is more about Monday being the day the acquisition is complete instead of actual news, NPR, FortuneBloomberg, and a story about beauty supplier Ulta, (keep in mind Wal-Mart is not out of position here either). Then for desert, I saw a story that should be considered seriously about how Amazon is the most overhyped company in the world.

I understand and agree that Amazon disrupted a lot of retail. Their total retail is 5% according to CNBC. And we all know and agree the classic big box stores are struggling with more growth going to online.

A really big statement in the CNBC article is: "But this is coupled with big names in the retail space — Wal-Mart, Costco, Home Depot, Target — seen as losing market share as their margins shrink and dollars shift back to Jeff Bezos' company, the analyst added." Hmmm, maybe, maybe not. 8/31/17 A bit of sanity, AMZN might be the weakest of the major retailers.

Those are four companies that I am following closely, the only one that I am not ready to open a position on tomorrow, if prices drop and the time is right, is Target.
One thing that will be interesting to watch are the brands themselves. Whole Foods has many "house" brands, (as do the rest). One of the Consumer Packaged Goods, (CPG) brands is Campbell Soup and they have the increasing problem that demand is decreasing for what they are peddling.


Bias alert! Kathy and I spend winters on Kauai, Costco and Wal-Mart are the best grocery buys on the island by a far piece.

8/27/17 There is an article that is better than most about why COST might be in for more of a dip in prices, naturally the AMZN Whole Foods is mentioned, but they point out poor eCommerce performance and lower membership rate than AMZN Prime, plus much higher PE than Wal-Mart.


The recent 2% drop in WMT yesterday was not enough to tempt, it is still really close to 80 and in my dreams I buy in below 70. However, the 8% drop in KR, was enough to get me to set a limit buy in case it dropped again today, (it rose).

I don't want to be a Blockbuster or Circuit City dinosaur and blindly bet against AMZN. We held the stock until June 26, 2017 and sold it for 1009.14. Today AMZN is trading for 945.26. It just isn't clear to me why WMT which is slightly up for the same 3 month time period is the next Blockbuster.

Nobody died and left me smart, but if we are in fact riding an 8 year old bull market, change could be in the air. The magic of the growth companies may be coming to an end. We didn't just sell AMZN in June, we sold:
COST @ 158.19 now 152.45
GOOGL @ 990.00 now 930.50
TSLA @ 386.69 now 348.05

And thank them all from the bottom of our hearts for their hard work that made profit taking possible. Now, with bull market ending, the thought of value coming back into style conceivable, we want to get back in the game. Leaving a lot of money on the sidelines does not make sense.

I am leaning towards larger companies right now. We have managed to get a position in IBM, I want to add more, but the pesky stock keeps going up. I did establish a position in XOM and may add just a little more if it drops enough. WMT and KR are on the shopping list.


Kroger is big enough that they should be able to compete, but they may be out of step, sort of like Chili's, Applebees, Radio Shack and so forth, if their model doesn't work they will get creamed. We still have a limit order in for KR.

9/8/17 250 limit@ 18.02

I may drop it further. Between 2008 and 2012 going into 2013 they spent a long time in the $12 - 15 dollar range.

Thursday, August 24, 2017

Buy list

8/31/17 Thesis, there will be some uncertainty in the markets if Congress screws up the debt ceiling and Government continuing resolution. Kathy and I have been able to buy some:
The potential buy list:
                     Today          52L        52H     Limit1   Limit2

AAPL          163.35         102.53   163.89
AMZN         967.59        710.10    1083.31
COST          154.44         142.11     183.18
GOOGL      943.63         743.59    1008.61
IBM              142.56       139.13      182.79
KR                  22.20         20.46        36.44
WMT             78.54          65.28        81.99
XOM              76.10         76.05        93.21

At reasonable prices on dips. We expect them to drop even further. Have to balance being careful with letting the opportunity pass. Plan to start using historical 52 week low as a guide.
NOTE: XOM is below the 52 week low when we bought it.

The problem is that even a 52 week low is potentially high since it is an 8 year bull. And any stock that has not appreciated since five years ago is not likely to now, unless there is one heck of a story.

Limits 8/31/17
KR    200 20.02
WMT 50 77.02
XOM 50 75.02

8/24/17 AMZN announced it was dropping prices on Whole Foods and KR dropped 8%, WMT 2%. Also, the US Government is having a tough time with their budget. Let's start setting some limits for worthy companies, who knows, wish us luck, will revisit ROK soon?

WMT 50 77.53
WMT 50 77.02
KR 200 20.52

Monday, August 14, 2017


After cashing out, I am trying to get back in the game at reasonable prices.

Exxon, (XOM) thesis: One of the largest companies in the world. They have been whacked by sustained cheap oil. They have debt and cash flow under control. They fell under their 52 week low today.

8/9/17 50 shares market 80.015 (opening the position to force me to spend a lot more time watching the company)

8/9/17 Limit 200 shares@77.74, I would not be surprised if that hits the week of Aug 14, current: 87.17. Even after the limit hits I would not be surprised to see the stock drop. I am tempted to break this into two orders, one even lower, but if I get too greedy, I may miss the bus, no reason not to sleep on it as is.

8/15/17 Limit hit 200 @ 77.94

Wednesday, August 2, 2017

DOW 22,000 and Cramer

I'm not a Cramer disciple by any means. However, he does make a lot of sense especially at major tops and bottoms. I thought this was sensible and want to remind myself of this:

"I found the celebration particularly disturbing because the last thousand Dow points were really the work of a handful of stocks — actually, just four of them: Boeing, McDonald's, UnitedHealth and Apple," the "Mad Money" host said. "In other words, the strength in the Dow isn't much of a tell for the broader market."

I agree with the analysis not that I have any right to second guess Mr. Cramer's analysis and would extend the observation to some non DOW stocks that are bringing the market higher, AMZN, TSLA, GOOG etc. He goes on to say:

"The Dow surged towards this arbitrary mark just as a large fund began selling its positions in a slew of Nasdaq stocks, otherwise known on Wall Street as a "sell program," Cramer said."

That is the whole point of this trading notebook. I am a small investor without access to Wall Street trading algorithms, supercomputers, and lightning fast trading. Right or wrong, and only time will tell my family jumped out of AMZN, TSLA, GOOG at the end of June 2017.

That money is on the sidelines currently. I think IBM is a candidate for getting back in, but need to be patient, right stock at the right price and all of that.  Back to Mr. Cramer:

What matters, though, is that there are plenty of companies out there that saw their stocks get laid low by these sell programs, and when they get taken down like that, you're always going to hear the sirens of panic telling you to sell everything," Cramer said. "In reality, it's more likely to be the sound of opportunity knocking. You just have to have some cash ready to buy the dip in a responsible way."

I tend to agree, so what are the buying opportunities? I still have my eye on Wal-Mart, but the price is very high. I agree with Cramer on transport and came to that conclusion myself, but still trying to study.

Stocks of companies with no, (or very little), debt and 1 year performance include: CTSX +8, LSI -9, -9, FFIV -12, TROW + 10, ISRG +52%. FRX -6, RHT +25, CTSH -18, ADSK -9, MA +42, EXPD -21.

Mini-thesis: if I can find solid companies with no debt, they will have an advantage. One to look at closely is Mastercard. It is up and I doubt it will drop much, but it almost perfectly matches Visa.

I held ISRG in the past and it was good, lost it in the switch to ETFs. Not sure if I want to add it back with my "mad money".

I want to like F5, FFIV, they just do not seem to have a really compelling product line. I ended up going with Palo Alto, PANW and did a bit better, but just sold it two weeks ago for an ETF. Citrix too,  CTSX, was really in a good place ten years ago, but I think the whole cloud thing thumped them a good one.  Some of these companies I really don't know, I used to use AutoCad every day, would be fun to start getting to know Autodesk, ADSK again.

Tuesday, July 25, 2017

WMT AMZN TGT shopping malls and all that Jazz

7/25/17 This is not going to be a post about buying stock in AMZN vs. WMT. The answer to that is simple. Buy both, but at the right price. If AMZN drops below 900 or WMT below 70, please wake me up! Until then, keep in mind there are macro forces working in their favor.

Target TGT

8/26/17 55.01 down 22% for the year. I still am not ready to issue even a limit order for Target. Too many questions, but still watching them closely.

8/15/17 Target has their issues, but they are too big, too well positioned to write them off. As other retailers fail, it makes a bit more space for Target. They are giving this immediate gratification, (Next day delivery etc), a close look and not just looking. Buying a shipping/logistics company! WSJ reports they are hiring the skills they would need: "Target is hiring former executives from General Mills (NYSE:GIS) and Wal-Mart (NYSE:WMT) to help bolster its food and beverage business. "Across all categories of our business, we are investing to build an even better Target (NYSE:TGT) for our guests," said Mark Tritton, executive vice president and chief merchandising officer. "We have been making positive progress with our assortment, presentation and operations."" Target is currently selling for 55.00. I am not big on the impact of earnings on stocks, but this is their chance to explain what their next steps are.

7/25/17 TGT is down almost 28% for the past 52 weeks. They need to make some major moves soon. However Morningstar, (A rating), shows they have a lot of debt. That could make that juicy dividend hard to fund over the next few years. I doubt they are a good long investment and possibly will be more market share for AMZN and WMT.


6/30/17 Motley Fool had this to say about Costco, "Management is willing to give up short-term profitability to keep its subscriber base thrilled with the shopping experience. Its 2% net income margin puts it far below other retailing chains, but has been a key driver behind its unusually high sales growth."

Big Box and Mall Retail Shopping Crisis BBBY, KOHL SHLD, RSHCQ

In search of a thesis: the next section has a number of reasons malls are in trouble and the retail jobs that go with them. Everyone knows that, the question is not who is going down, retailers, REITs that specialize in malls. But, I would prefer to profit on growth, who and what stands to benefit from this opportunity.

9/20/17 Bed Bath and Beyond BBBY dropped 15% in the stock market today to 22.81. This is a very small sample size, but Kathy and I have only been in a store, one time in three years.  Granted out house is furnished. When we needed washcloths we went to Wal-Mart.

9/19/17 Kohl and Amazon have announced a business tie-up, they are going to test being an Amazon return center. This is the closest thing I have seen to a potential re-vitalization of shopping malls and complements many AMZNs strategy, not sure about Kohls.

9/18/17 Now TOYS, Toys R Us looks like it will file for bankruptcy. This story keeps coming down to debt, "It must refinance $400 million of its crushing $5 billion debt next year with lenders who have grown less patient about waiting for results and who are less confident about the future of traditional retailers." In 2005,  KKR and Bain Capital and Vornado took the company private in a $6.6 billion deal. No they have a lot of debt.

8/26/17 The latest media attention seems to be Footlocker, FL, 35.88 down 46% for the year and other sporting goods stores.

UPDATE: 6/3/17 this notebook entry started out focused on Sears, but I realize that the entire retail industry is strongly affected.

SHLD. For years, many would argue since 2004, Sears Holdings, (Sears and K-mart) have been faltering. They are now at death's door. The Washington Post has a great story about the fall of Sears. As of June 2, SHLD has lost almost 45% of its value. 6/13/17 SHLD has announced they are cutting 400 jobs. Conventional wisdom is still that Seritage Growth Properties (NYSE:SRG), a real estate investment and has interests in 266 properties, most of them from Sears Holdings.

Since the REIT was created in 2015, financial pundits have been claiming that as Sears Holding decreased, the REIT would increase by leasing the closed properties. Recently, we have seen some, "I'm not so sure" posts. This is because malls are closing, CNN Money reports that 25% of the malls will be closed in five years. If this is true, who will lease SRG's properties, (SRG is down over 10% in the past 90 days)? Sears Canada, (SHLD is an investor), is running out of money and must borrow to remain operational for another year. Since these are mall stores this also affects Canadian REITs. 6/22/17 WSJ reports Sears Canada about to file bankruptcy.

Sears Holdings CEO Ed. Lampert's Seritage thesis. As the market currently stands physical shopping centers, home of the declining big box stores, are ideally located, and at least at the moment, believed to be valuable real estate. If Sears Holdings unravels too fast for Seritage to take advantage then what? It isn't just Sears/K-Mart, Macy's, JC Penney, Kohls, J Crew, etc. are closing stores fast, see Clark report for comprehensive list. Nordstrom just released a PR expressing interesting in going private. It is worth pointing out that Wal-Mart goes it alone as opposed to anchoring malls. In some cases, the chains are going bankrupt. 6/20/17 Amazon Prime Wardrobe hits JC Penney and Nordstrom, (does anyone actually buy clothes at JC Penney other than kids to small to fight back to school?)

Is the combined Sears and K-mart market share enough to matter? Do they command enough of the market that someone can profit from their demise. Six years ago I would have said yes, today, not so much. 6/8/17 Sears is closing 72 more stores leaving 1,200 down from 2,073 five years ago. 8/26/17 Sears posts another loss, suppliers report trouble getting account receivable insurance.

Malls in general.

9/20/17 I found a 2012 URL with the top 10 REITS with mall exposure. Number 1 was SPG, they appeared to peak mid-2016 above 220, have dropped at lot and are selling at 159 something. Note: when they need credit to spruce up malls, where is it going to come from? #2 GGP has a similar curve.

Is online retail the future or even the present? BusinessInsider predicts 8 - 12% growth in online retail in 2017. Globally, Amazon Inc., Wal-Mart Stores Inc. and Apple Inc. are the top 3. A better way to look at purchase future is high-value. This 1/5 of customers account for 50% of sales and that is a long standing rule of thumb.

- Is the overall decline in big box brick and mortar and the malls that host them a major factor? USA Today has a thought provoking piece. For a real downer Market Watch is comparing brick and mortar to the oil and gas industry. CNN Money says, "Brokerage firm Credit Suisse said in a research report released earlier this month that it's possible more than 8,600 brick-and-mortar stores will close their doors in 2017. " McKinsey says that just selling doesn't work, the mall has to be an experience, (take with a grain of sand, shopping at Wal-Mart can hardly be called an experience, that is back to value.).

NPR carried a piece on the malls in danger, "LEINBERGER: It's the middle-market malls that are in biggest danger of going dark. The fortress malls - those huge, you know, 1-and-a-half-, 2-million-square-foot malls like the King of Prussia Mall outside of Philadelphia - those are fine. But it's the ones anchored by JCPenneys and Sears that are and will go increasingly dark."

I did find an author that claims physical space is "coming back", "But physical space is reinventing itself. Malls continue to focus on "experience" versus "things". The example he gives is PEI who has lost 54% of their value in the past 12 months. The author may be right, eventually, but I am betting against physical space in the short term. Have you ever seen what happens when the asphalt of the parking lot starts to give way?

- Who is the "dark horse", the unknown that will benefit from the change in shopping habits? Online retail!  If you focus on Amazon, most people say Wal-Mart, the number 2. If you focus on Wal-Mart most people say Target, which doesn't make any sense to me, but bears investigation, (they are profitable, have an attractive P/E and a decent dividend, (as of 6/1/17 TGT is down almost 20%, they also have more debt than I like to see, but they are managing it so far.).

Retail jobs crisis. 

And what about the people that work in those stores? Retail, according to marketwatch has shed 30,000 positions over 12 months. BusinessInsider reports, "The US administration has focused its rhetoric on coal and manufacturing jobs. However, it's notable that the number of workers in general merchandise stores who have lost their jobs since October is greater than the entire number of people employed in the US coal industry." And yet we do not hear the furor that we hear from manufacturing and coal. But it can't remain silent much longer as it is impacting the economy. What other industry needs the skills of retail jobs? There are already "transition" articles appearing, but this one sounds like a rehash of retail. Some of them will end up in Amazon fulfillment centers, but retail is spread across the country and fulfillment centers are strategically placed.

It does not seem like there is enough demand for Stein Mart, Hobby Lobby  and Five Below to reuse many of the big boxes. Empty big boxes can be adapted for churches, after all, most mall parking lots are not full on Sunday morning, however it requires a church with solid funding, (if you were a loan officer, would you make a loan to a church), in need of a big building.  Looks like another case of a big opportunity looking for a bigger idea. Oh well.

Dark Horse revisited, online retail.

Rather than rehash Amazon and Wal-Mart, what are the categories of items being purchased online?  According to EngageCustomer, "The top five products bought online in the last 12 months were books (63 per cent), clothing/footwear (61 per cent), DVDs (54 per cent), CDs (43 per cent) and beauty & healthcare products (32 per cent)."

Wednesday, July 19, 2017

IBM (taken from Es Tech Stocks)

8/8/17 The first limit order hit, so we now have a position with IBM. Want to really keep an eye on things for the short term to see about adding to the position.

7/23/17 I moved the purchase price down and reduced the amount of shares. New initial purchase is 143.02 which is below the 52 week low. Second tranche is at 140.02. Thesis: I still believe they are a good company, better priced than most of the tech and their strategic initiatives are in the right place. I think the turn around is going to take longer than they had hoped for. The goal remains to make a significant investment of my family's money, but at the right price.

Rather than recount declining quarters YoY, dividends, stock buybacks and free cash flow, here is a great article that summarizes my concerns late July 2017 and why I dialed the purchase back to be more conservative:

But in all the gloom and doom I need to remember something. IBM is a technology company, or at least they used to be and with the purchase, I am betting they still are. Tech companies create products that have value out of seeming thin air - like blockchain. Betting against Watson in my view is a big bet.

7/22/17 IBM continued to drift down slightly through the week, we are approaching the 52 week low. After a lot of thinking, I think holding to the 145.02 plan is the good choice, it is very likely to hit in the next few weeks. Maybe even being more conservative than that makes sense. We have benefitted from a very long bull market. My Vanguard ETFs are heavily loaded towards GOOG, FB, etc. But IBM for all of its issues seems to be the best value buy of the tech stocks large enough in grow iteratively. I realize I should be looking for a diamond in the rough, but I should not turn down a Steady Eddy.

I try to do my own research, but as I am getting close to the trigger point I notice most of the industry research says hold or neutral, (though the e-trade blogger sentiment says bullish); possibly another vote for being even more conservative?

7/19/17 IBM dropped very near my limit on earnings reports. I think I had better do a change order, moved it to 145.02.

6/1/17 Set a limit buy of 145.01 to re-establish a position with IBM, which used to be my largest holding. However, that was in basket Cs and got sold in the Vanguard ETF/Muni change. That turned out to be a blessing, IBM's stock price has dropped over $10.00 since then with a high water mark of 182.79.

Truthfully, the chance of hitting 145.00 seems a bit low based on recent markey performance, but some thoughts that might be downward pressure:
- May 5 Warren Buffet sold 1/3 of his position in IBM dropping it from the 158 zone to the 152 zone
- IBM pension plan is dumping IBM
- Essentially 20 consecutive quarterly expected revenue shortfalls, (we can debate accounting practices later),
- Tech, in general, might be overpriced, macro factor, IBM however, is pricewise one of the better buys in tech,
- They are in transition from services and product to cloud and cognitive AI and the growing as we approach earnings on 7/18/17 analysts will be expecting the new parts of the company to grow.

IBM Thesis, (or at least wild hope). IBM is a company fraught with contradictions. My hope is that my family can establish an initial position on a dip, add to that carefully and then profit as some of the emerging businesses start to establish and prosper.  IBM for us has been a long investment so this is not a short term strategy. There is little doubt that there is some financial trickery involved at this point, if they can get their revenue mojo back on, I suspect all will be forgiven.

Watson, I am going to start tracking Watson separately, it could be the major driver
- IBM Watson and Sesame Workshop team
- Watson cancer and Hackensack team
- Watson goes to Wall Street for financial legal compliance

Things to research:
- What if 145 is too high once Wall Street gets more data priced in *falling knife*. Consider splitting the buy L145, L140, L130 or some such, once the supercomputers kick in this could happen in a wink
- Impact of new 5nm chips, will not affect stock in 2017, but surely by 2019
- Stock buybacks propping up the stock price
- IBM debt in general
- Can they really keep upping the dividend
- R&D investment lower than peers incl cloud providers MSFT and AMZN
- Spectra believes IBM will have all the mag tape business
- IBM Cloud, WhatsApp leaving the IBM cloud, Forbes impressed, now includes identify as a service,
Cisco/IBM teaming
- IBM's glass door ratings, 6/21/17 cutting contractor hours,
- X-Force is expanding to Poland,
- Is Watson their future or a marketing campaign, IBM teams with Hortonworks for analytics, they are having a go at the weather,
- IBM and blockchain, teaming with AIG for smart insurance, working with Euro banks, trucking industry,

Thursday, June 29, 2017

Thank you Chase Purdy (Silicon Valley Unicorn definition)

Unicorn, the white horse with the horn, has numerous alternative definitions, some of them not to be used in polite society.

I keep seeing the term used in financial documents, but with no explanation. Today I saw it defined, not once, but twice. Slashdot with Chase Purdy, "By contrast, Hampton Creek -- just a 20-mile drive from its Silicon Valley rival -- has raised more than $120 million since 2011. It's one of Silicon Valley's unicorns -- a company that has a valuation that exceeds $1 billion."   Tech Crunch, "However, it’s last private valuation was close to $1 billion, the company priced under that mark, and has since moved past the $1 billion valuation threshold into unicorn-land."

So there we have it, apparently a unicorn, in financial parlance, is a company, possibly pre-IPO, that has a value greater than 1 billion.

Tuesday, June 27, 2017

THE NEW$$$$$ and Google News

UPDATE 6/29/16 Either the day I wrote and posted this or the following day, Google News updated its format. I think they are growing closer to the "Sunday Newspaper" experience of yore. If there is money to be made in digital news, these are the folks to beat.

Paper newspapers are dying fast, everyone knows that, (except for the exceptions). We want to read our news online. And we can, sort of. I picked up on this in my information warfare - perception management blog. It is important because it impacts what the man on the street knows - preferably and it also true.

However, this is my investment notebook. How is it possible the Wall Street Journal, (profitable), Washington Post, Guardian are struggling? What about the advertising model?

Yet they want more money from us, the consumers. And, I for one am willing to pay for what I use. However, there are two problems:

  • Does the publisher cover what I need to know?
  • Does the publisher have a bias I need to avoid?
I understand the first problem. If revenue is not coming in, they can't hire reporting staff. The obvious answer is crowdsourcing. When planes crash, police shoot people, buildings burn, or people are saved by jumping into a crowd, odds are it is filmed on a cell phone. Crowdsourcing is already happening and will not stop or be stopped, we are there. However, the potential for trolls, fake news, published assumptions is great.

The second is a bit trickier, bias. Two of the better and more prolific publications right now are the Washington Post and the New York Times. They are competing with each other and that is probably a good thing. But they seem to have a liberal bias. This must read from Pew makes it clear, consumers seek out their bias, "the study finds that those with the most consistent ideological views on the left and right have information streams that are distinct from those of individuals with more mixed political views – and very distinct from each other."

I am a confirmed centrist, I try to read intentionally balanced sources like AllSides. I vote for qualified candidates not along party lines, which means I have to educate myself with tools like Google Alerts by name, (in advance of the election). I need to be careful what I feed my brain, conservative or liberal. 

But, the rich question is where is the money in news media? Mediaguide reports, "The self-evident downside of the digital revolution for media houses is that people are less willing to pay for journalism, as it can be found online for free."

This assumes people even want "news", PBS reports, "As three former News Corp. executives recently told The New York Times, News Corp. today has become "a sports and entertainment company with a newspaper problem."

Assuming there is a set of customers that want news, if you are making money, by advertising, subscriptions or even being paid to influence elections, you have to make your packaged content desirable. And if you skip the well proven Euro tabloid model, (sex may not actually sell), then you quickly get back to bias, including the bias for "bad news".

As an investor do I invest directly in a corporation that owns news outlets to weight my exposure over monster index driven ETFs? This dated article tries to show the players. 
  • GE, which we own gets us Comcast, (NBC)
  • Newscorp, Fox, WSJ, NY Post
  • Disney, ABC, ESPN
  • Viacom, MTV, BET, CMT
  • Time Warner, CNN, Time
  • CBS, Smithsonian
DIS has a paltry dividend, minor exposure to news, is off a bit for the quarter. We clearly have it in our ETFs, I am not moved.  NWS is too bouncy for me. GE, we already hold, the retirement debt has my full attention. Viacom, I will pass on, but the opportunity for targeted news with BET and CMT is duly noted. Time Warner, TWX, is also too bouncy for me, you need one of those flash crash Wall Street auto-traders for this. CBS, well is CBS. With apologies to True Lies, none of the choices are blowing my skirt up. If I wanted low margins coupled with high competition, I would invest in a grocery store chain.

Yet something in my reptilian brain does not accept this. People want news, they just do not want to pay for it. Sex doesn't sell, they say, (and I doubt that is true). Do you remember waiting for the Sunday Newspaper as a kid? We would skim the front page and local news, ditch the ads, and head for comics. Some kids read the sports or arts pages, I read the financial section. It wasn't the news, per se, it was the experience, (yup, the same experience line they use to prove big box malls aren't going out of business). Today, the only time I read print newspapers is when the hotel gives them out for free and I take them for the airline flight, the "experience" is trying to fold the paper pages in the tight airline seats. Newspapers were meant to be read on a big flat table.

So, how do I read news today? Google News! I don't care about their secret sauce patent, it is fast, gives me what I need, (the basics) and seems fairly balanced, my own bias choices affect what I see so I LOVE their balance. I spend enough time reading Google News, it makes sense to use the personalize feature, you should check it out if you haven't. There are no distracting ads, and a fair amount of localization, so I do get some of the "Sunday paper experience".

But how do they monetize Google News? I am not sure, but it is one more reason not to bet against GOOG, GOOGL. While there does not seem to be that much money to be made from being a news producer per se, I think they will give the big six a run.

Monday, June 26, 2017


Kathy and I have been very thankful for the runup in these stocks and do not take them for granted. However, we decided to profit take and lay low for a bit, at a minimum for the Wash-Sale 30 day period.

We set the market sale order over the weekend for the opening bell Monday June 26, 2017. Now of course we are thinking where will we find replacement investments. That would be from the notebook entries in the past and the ones to come.

Current analysis

  • GOOGL is a fantastic company thinking about executing in the present and opportunities for the future. We could not resist the opportunity to profit take, but tech in general is more overpriced that Google in particular. We would buy back in with the right pricing.
  • AMZN is going to face some headwinds. We saw this Seeking Alpha comment, "Earning misses have historically meant very little to Amazon stock as funds have run in to purchase the stock at every dip." We are very thankful for the profit, probably need a couple of changes to re-enter the stock in a meaningful way.
  • COST is another well run, operation focused company. One of the things they do is choose their own location in general instead of anchoring malls though they did some of that a while back. I think the dip on the AMZN Whole Foods purchase was silly, but since the profit was there and we were rethinking that portfolio we took the money and ran.
  • TSLA, the whole car industry is going through some major shifts. We expect headwinds for the biggest players, some success for companies with the right niche, and alternatives such as ride sharing before the smoke clears. They were kind enough to gain a considerable amount in the time we owned them, so we are taking a break. 

Thursday, June 22, 2017

Debt in Canada, Sears Canada, Buffet and CHCG

Sears Canada is seeking bankruptcy protection, closing 59 more stores, slashing payroll. There are no white knights, expect pennies on the dollar for creditors and even more pressure on Sears Holdings USA.

Meanwhile Canada has world's fastest growing private debt, largely household, that could set up a property value meltdown that could extend into small business. The Bank for International Settlements (BIS) puts them in the category of likely financial crisis.

Warren Buffet is going to extend credit to Canadian lender Home Capital Group. It goes without saying the money comes with strings attached.

Analysis, the Canadian economy is over-extended and ripe for a crisis. We have sold our Canadian bank stocks and trimmed EWC, our Canadian ETF.

Tuesday, June 20, 2017

Kroger is starting to get attractive but Wal-Mart may be better

Amazon is buying Whole Foods so Wal-Mart, Costco, and Kroger are doomed!

Hmmmm. Kroger is a dividend payer, (albeit a bit paltry), they have been in business forever so they can spell supply chain and location. I live in the Pacific Northwest and there isn't a Kroger on every corner, but Fred Meyer, Ralphs, QFC and they are all Krogers, (not to mention the greatest of all stores for a geek on the planet, Fry's).

This strength is also their weakness, they are one of the largest grocery stores, but are spread a bit thin with electronics, jewelry, clothes and so forth. In aggregate they are a lot like Wal-Mart, but not as organized and they cannot compete on price.

Over the past five years KR was a better investment than WMT. However, if you held on for the past 12 months, KR got wasted.

KR is cheap and I am thinking about a purchase, but I do not understand them and I don't think many analysts do either.

As always debt is one of the first things to come up on my radar. They picked up $1B in 2016 to finance the purchase of Roundy's. One analyst said, "Levenson wrote that Kroger doesn’t have as much cushion as it used to in its debt ratios. But it can quickly rebuild that with strong free cash flow in the next year or two." However, 2017 has been a rough year. Morningstar rates them BBB, 4 star. However, a lot of debt is due 2019 - 2022.

Wal-Mart, by contrast has an AA- rating. And the debt due bulge is 2034 - 2043.

I need to take some money off the sidelines for one or the other.  While the world is concerned about AMZN, it might be a bit of a buying window. Lidi and Aldi, (Aldi appears to be two different companies, mostly in the Eastern half of the USA), may be threats in the future, but not in 2017 - 2018 and they both will have to face the eCommerce dragon.

Saturday, June 17, 2017

GE: The lesson for future retirees

GE is in some trouble. Stock buybacks over the past few years ate up their "running room" and did not yield the desired results. They have some troubled business units. And somehow they need to come up with 47B over the next ten years for existing retirees.

Bloomberg reports, "According to Dennis Rocheleau, a 36-year GE veteran who was its chief labor negotiator until 2004, the company considered its pension well prepared and thought its investing prowess could help keep the plan in shape. No one could foresee the financial crisis or the rock-bottom rates that followed."

Fifteen years ago, my financial advisor told me the day I retired he would put everything in a bond ladder.  Today, of course, it is 60 - 70% stock chasing returns, (though at higher risk). What changed? Those rock bottom rates Mr. Rocheleau refers to.

A well placed CNBC article reports not saving enough for retirement early enough is the top financial regret most people have. But what if you did save? And then the financial crisis and the rock-bottom rates that followed damaged your nest egg, (because they probably did).

Part of this is much ado about nothing. If you are trying to buy municipal bonds, you have probably noticed you are not alone in the market. Yes, there was a financial crisis - followed by seven or so really good years depending on how you count. Most individual investors should be back, or even up from the crash. So now what?

Observation: Signs are increasing that GE should not be held long
Orientation: I have 2k shares in MLs, Don't worry about ETFs
Decision: Look for a replacement holding
Action: Communicate with broker, they will not be a good long choice over the next decade.

Thursday, June 1, 2017

Es Tech Stocks

I am not an investing expert. This is my trading notebook for myself, friends and family. You are welcome to my ideas and research, but please make your own decisions and do your own research. As I remind myself all the time, this is real money we are spending.

Basket Es Thesis:

This money is a retread. I used to invest with Motley Fool guidance, but the MF advisor left several years ago, they changed everything around, so I decided that most of the money should go to Vanguard ETF/Munis. I still keep some tech stocks, and Wal-Mart, (based on their focus on online sales), and IBM are welcome here at the right price).
NOTE: I will be tracking IBM and Wal-Mart separately

6/5/17 sold my entire position in GOOG, still have GOOGL due to the stock split.

Historical: Basket Es THESIS (this portion last updated 9/18/14): 

The strategy in basket Es is to follow the advice of the Motley Fool Million Dollar Portfolio, a paid advice service. When they say buy, I do, when they say sell I do. It is one of my best performing strategies and I have enjoyed the communications from them. I especially appreciate that they allow me to read a transcript of their video updates. I process information much better and faster by reading.

2/27/15 The POT sale executed @35.72, really glad I used the trailing stop. As I sold out the news is all about people buying POT. Was this a mistake, or the blessing of not being where the majority is? Only time will tell.

2/18/15 PRLB is a rapid prototyping company that is growing rapidly. There was a bit of a dip today -$2.33 at present. Put in a limit to open a position that is good for the day, we have 31 minutes of market left to go.
PRLB 50 Limit 71.10 Current 71.17
Executed at 71.10, now let's put in a bigger order for less money:
PRLB 75 Limit 67.02 Current 70.99 and bouncing like a beach ball

2/17/15 I have wanted to open a position on Tesla, (TSLA) for some time. I have a strong sense that it is going to drop after I get, but this is a long term position and if it does drop significantly I will be very tempted to add to the position. What is the driver that causes me to do this now? The more I think about the battery factory and its potential in addition to electric cars.
TSLA 35 Limit 203.00 Last close 203.77
2/18/15 Bought at 203.00 current 204.89

1/27/15 I may need to rethink my thesis for this basket, can't sort out all the mail, but MDP may be under new management.

The new team, (and I am reading about that right now), has made several sell recommendations, including Tile Shop, (TTS), and Bridgepoint, (BPI),  I agree and have closed those positions. They also recommend closing Potash, (POT). I find myself squeamish here, but current price is 36.53 and I have a trailing stop sell at 34.69. POT has continued to go up, as of 2/16/15 the sale point is 35.52, last close 37.04.

The market bashed Microsoft down over 8%. I have concerns about MSFT myself though as a Washington State resident I wish them well. Added 25 shares to my position @ market, (43.03).
2/11/15 Last close 42.38.
2/16/15 43.87

9/18.14 Closed my position in Exelsis, (EXEL). Great, more cash to invest in an aging bull market *grin* Infinera, (INFN), oh yeah. The hardest lesson in investing is to wait. I am still hugely overweight on this and aware the CXOs are cashing out. And every share is long, (over a year). Even so, I think I will ride this train a bit longer. I rarely make recommendations to family members, but I tipped this one to Trey, Hunter, and Ben.

7/22/14 WFM never hit, need to rethink it. Set a limit order to increase my holdings of LL. They missed their numbers and the market punished them. 50 shares, limit @ 54.00, last close 55.71.

6/11/14 Trying to open a position in Whole Foods, (WFM). They got smacked today, but are recovering in after hours trading. Going to use a limit order for safety. Price at market close is 41.24, but with after hours trading they are bumping 42.05. 200 WFM 41.00 L 41.24.

6/7/14 I have a solid holding of Amazon in my ecommerce basket, but will set some limit orders to open a position here as well. 20 Limit 320 LC 329.67, 25 Limit 310 MDP recommends selling Hillenbrand, (HI), to raise cash for other opportunities. Executed the trade, but did it as a trailing stop of 5%. I put the bid in on Saturday June 7 against a Friday close of 31.13. So far, the peak is 31.69 on June 10. According to the online stock service, the sell trigger is currently at 30.096.

5/12/14 Setting up some limit orders Tile, (TTS), 100 L@13, L 13.64, Invensense, (INVN), 50@18.00 L 18.42

4/23/14 Market was a bit soft. Using a limit to add to EXEL position, 650 L@3.40 L3.445

3/11/14 Market dropped a bit today, added to INVN position, 50 M@21.23

2/20/14 Leap Frog, (LF), leads the market in kids tablets, but their stock has been creamed. 750 shares, Limit@6.60 LC 6.78

1/29/14 Closing the position on Denbury Natural Resources, (DNR).

POT They have gotten cheaper, my thesis is that as populations grow fertilizer will be important. I wanted to set a limit order, but this broker would not let me. When I tried to call for help, the answering machine said they were closed. OK, OK, Market, 160 shares, last close was 30.74.

INTC They have been on a climb, thesis, they will solve the mobile chip issue with System on a Chip. Market 200 shares last close 24.45.

11/22/13 TSLA As insane as it sounds I want to open a small position on TESLA, they are selling well and at higher margins than Ford or GM, ( though I love our Cruze). Also, opened a larger position on POT, thesis is there are only so many potash mines possible on planet and the world will keep growing crops.

1/10/14 100 Limit@18.00 last close 19.57
5/17/13 INVN was down 3% today. 100 Limit@11.60, last close 12.42

1/10/14 Still liking Lumber Liquidators, but think this ride has been too good. Set another trailing stop for 5% with a goal of reducing this to 3% of my basket. Last close 104.32.
5/2/13 Lumber Liquidators has been incredible, but I am going to sell part of the position. Set a trailing stop at 5% which works out to $76.50. It hit the same day I set it.
5/17/13 This is insane. Last close was 87.50, great company, but why is the stock so high?

4/16/13 Market took a hit today, probably because of the Boston Marathon, our prayers and concerns are with the injured and those grieving the lost. Added to my position in IPGP and DNR.


1/10/14 FIGRX 40.46 now up +4.5%, FIREX 10.19 -9.8% Tried to set an online alert to monitor these, but the website seems to be having issues.
5/17/13 FIGRX 37.15 FIREX 10.82
FIGRX  34.72 up up 13.3% for the year
FIREX 10.83 Up 33.87% for the year
3/23/13 There are two mutual funds in a very small basket on the same online broker, but a different strategy and account number. The idea was to increase my international coverage. Both are down they are FIGRX and FIREX. I have held both for years.

Today, I used a fund screener to see if I could do better than FIREX (International real estate).
                 30  90  180  1yr   5yr
FIREX      1    1    1      1      -
TAREX          3                    2
GRSIX     3    2     2     3
JIRSX      2           3     2       1
Decision: hold FIREX and hope it can make up some more lost ground. Set an alert and a calendar setting to check on it.

                 30  90  180  1yr   5yr
FIGRX      2    1    1      1     2
FSIIX        1    2    3      3     3
SWISX     2    2     3      3
VDMIX    2     2    3      3
TRIPX      2    3     2      2     1

I also screened it against ETFs
FIGRX     1     1    2     1       1
GWL                    1
EFA         2     2            2
VEA                     3      3       3

The mutual funds are VERY HIGHLY CORRELATED, it almost does not matter which one I pick. There is more variation between FIGRX and the ETFs. I hold SCHF in basket Cs. The strategy there is to use the online broker's offer to trade with no commission and add small amounts on days when it dips. So even if the SCHF ETF does not outperform FIGRX, with free commissions, the ability to buy on dips and the much lower fee, at some point I should make SCHF the primary way I play the FTSE Developed ex-US Index.

FIREX 10.41 I am still down 8%, this is only a Morningstar 3 star with an expense ration of 1.19, this is one of those what was I thinking moments, hopefully we still will make a bit more forward progress.
FIGRX 36.90 down 4.67% from the time I bought it


1/10/14 Director Kenneth Goldman just unloaded 12,100 INFN shares at an average price of $10.00 netting $120k. Wonder what that will result in on Monday?

7/23/13 11.61 some financial group called Needham has raised the price target to 16.00.
6/1/13 10.53 can you believe it? Wow!
5/1/13 Finally a pop. A loud resounding pop. I try to be fairly patient as an investor, but this was overdue. I close my eyes and try to imagine the pain the short sellers are feeling. Last close 8.42.

5/17/13 9.62
4/20/13 6.26 this is now the 2nd worst performing equity in the basket. And they just installed a 100G network that is an astounding 38,00km long.
Update March 18, 2013 7.02, INFN won two more customers, Pacnet and Akado, who knows?
Update February 12, 2013, INFN is still making some progress, last close at 6.79, but it is being jerked around by Wall Street Trading programs. The word picture in my mind is a Raggedy Ann Doll in the jaws of a 200 pound Rotweiler.
Update January 10, 2013 6.51 short intrest still 14,511,000
Update January 2, 2013 major update 9% in a day closed at 6.34, according  to Short Squeeze, short interest is 14,511,000 down from 14,955,300.
Update January 1, 2013, last closed at 5.81, will be VERY interesting to see if it can keep climbing in January 2013.

Update November 5, 5.07 another positive day; who knows
Update November 28, 5.41, up 11% in three days. Come on and pop! When a stock has a lot of short interest and the short sellers have to close their positions it can accelerate the increase.
Update November 29, this press release is fairly exciting. It talks about demonstrating a Software Defined Network ( SDN ) using Open Transport and Open Flow.
Update December 6, 5.73 and it dropped .06 on the day
Update December 17, 5.84, up 34% in 30 days. With all respect to Marvin Martian, "Where's the pop? There was supposed to be an earth-shattering pop!" Well, this is one of those moments where individual small investors have to sweat the Wall Street Efficient market engine. The number of short stocks is increasing when the stock is up 34% in 30 days. What does Wall Street know that I do not?
Update December 21, 2012, I am guessing some Wall Street program made a pretty big sell bet this morning. INFN had raised to 6.05 and then plunged to below 5.80 and closed today at 5.94. So it is still on an uptick with a setback today.

Infinera Thesis 11/4/12

The biggest reckless play I have in the entire portfolio is Infinera, INFN. I have been in this equity for a long time and watched it fall further and further, but believe in their technology and also believe we are going to need faster and faster networks. This is my field. Every week or so, I pull it up in Google Finance hoping to see forward motion. Every week I look at my Google Alerts hoping to see of another sale of DTN-X. So far, all I have seen is more red ink.

They have been increasing sales and the fourth quarter of 2012 should give a lot of clarity as to whether they have a chance of shaking the short sales and earning back the ground they have lost in the market.

Hillenbrand (HI)
7/23/13 I was reading an analyst note saying this casket maker would soon be dropping. They are up 6% for the month and a number of other analysts say things look good for them. Current price is 24.95.


11/18/12 Markel is going to take some damage as a result of Hurricane Sandy. I am *assuming* ( yeah, yeah, I know), the earlier drop was a result of both the fiscal cliff concerns and also the Hurricane. I picked up five shares to add to my position using a market buy@482.00
7/23/13 543.40 up 25% YTD