Investing strategy for children

A month ago, I was up on the Motley Fool web site and I read the following:

I just read this, "Start them without their knowledge. Just begin before they're old enough to ask about it! CromulentBrad's parents did this, buying shares of several companies they related to when he was little. Later, when he found out, it was exciting to see his holdings grow bigger almost automatically. He's planning to do the same thing for his 19-month old daughter.”

That seemed pretty cool, so I wrote a relative with young children and asked, "If you have the spare time, can you think of 5 - 10 companies the kids identify with. Would it make more sense to have two lists, one for each?"

And the reply was:
- Nickelodeon. Owned by Viacom. VIA
-Hmm Target TGT
-Cheerios made by General Mills .GIS
- Leap Frog..LF.. 
-Hershey ..they love chocolate milk HSY
-Suave.. There kids shampoo/ body wash owned    by bath and body works ..BBW
- Tide P&G

All of these products they readily identify with by name and use. You have come up with a very cool idea indeed! 

Now we all know that some of these products only account for a fraction of the revenue of some of these products is only a small component of the total revenue of the company, but that is not the point. The point is to get them thinking about investing.

Let's do a quick analysis.

• VIA, they are loaded up with too much debt for my taste, let's pass on this one.
• TGT, more debt than I like to see, but they have dropped a lot, partly because of the data breach, and that retail store has a loyal following. LC was 56.37. 5 shares for each kid would run 281.85
• GIS, again more debt than I like to see, but Cheerios is an enduring brand 5 shares would be around 248.1
• LF, largest children's tablet maker, market has beaten this down. Say 40 shares.
• HSY, low dividend  yield, high debt, not a compelling purchase, however, they have a go to market strategy of becoming international. 2 shares apiece.
• Bath and Body is privately held, nothing to do there.

M + S (each, please reinvest dividends)
5 TGT market 281.85
5 GIS market  248.1
40 LF market 280.00
2 HSY market 215.16
4 trade fees = 36
1061.11 let's round to 1075 each

2,150.00 total.

UPDATE 2/5/15 Just read an article in Seeking Alpha titled The best gift you can give is stock. Since I have already taken action, I am not going to do any more. But it did make me smile.

FIs A portfolio strategy based on Jim Collin's Built to Last

2/23/14 in Built to Last the comparison company to Johnson is Bristol Myers, (BMY). Let's look at the relative performance of the two:
              30         90       180     1yr         5 yr      10yr
JNJ         -2.97    -3.92    3.69    20.08      67.46    71.7
BMY      -1.21     1.37   29.95    46.71    165.18    91.5

Let's look at debt to assets, P/E and dividend yield
JNJ     ?         19.03    2.88
BMY  21.61   34.91    2.66

The Built to Last corporate responsibility part of the thesis clearly does not work in this case. Do we add BMY to the fold? Yikes, tried to buy, but the online broker was down, will set a Google calendar entry for Monday.

2/11/14 Been pondering the notion of building a company designed to succeed.  Was reading about some of the things Google is up to. Obviously Google has not been in business 50 years, however that begs the question, how likely is Google to be around 50 years from now. Just pondering.

2/7/14 Sony plans to sell their VAIO product line. They are also losing money. They may well be the first replacement from the original Built to last list.

2/6/14 Closed energy positions: APA, ENPH, EOG, EXC, now we are ready to go with the new strategy, first up for consideration is 3M.

• MMM This was one of the first 10 stocks I purchased in my investing career and have held it about 30 years. Meets the criteria and the fundamentals look fine. This is a good time to pick this up and open a position. 20@Market. Last Close (LC) 127.36
• American Express, (AXP), meets the criteria, in a heck of a great industry, have a bit more debt that I would like to see. Let's try a conservative limit, 20L@83.00 LC 83.70
• Boeing (BA), what's not to like, I live in Seattle :) Biggest downer, they have very aggressive accounting practices, sooner or later they will get taken to the woodshed. Everything else is pretty square. 20 L@120, LC121.4
• Citibank, (C), has a high beta, 2.71, let's see if we can get lucky with a mildly aggressive limit, 40@L46, LC47.06
• Ford, (F), great company, I have owned 2 F150s and currently have a Mustang GT 5.0, however, they have a lot of debt, going to pass for now.
• General Electric, (GE), will go for an aggressive limit, 130@L22.00 LC24.52
• HP, not sure they meet the criteria, hold
• IBM, this is actually one of my largest holdings, 15@M LC 174.24
• JNJ, 30@M LC 87.28
• Marriott, (MAR), I have never followed this company. Pass till I get my homework done. LC 47.89
• Merck, (MRK), do not know if they meet the criteria, Pass. LC 53.53
• Motorola, pretty durn sure we will need a replacement
• Nordstrom
• Philip Morris
• Procter & Gamble. (PG), Looks like a decent buying opportunity, 40M LC 76.45
• Sony, (SNE), I do not think they are a market leader anymore, probably need a replacement
• Wal-Mart, (WMT) 30@M LC 72.87
• Walt Disney, (DIS), 30@M LC 71.76

Thesis

I was rereading and couldn't get the table of the companies used in the study out of my head. The market is off just a bit, so maybe it is time to create a new basket. These companies, at the time of the writing, met the following criteria:

• Premier Institution in its industry
• Widely admired by knowledgeable businesspeople
• Made an indelible imprint on the world in which we live
• Had multiple generations of chief executives
• Been through multiple product (or servicer) life cycles
• Founded before 1950 (or has been around 50 years)

The companies they selected for the book:

• 3M
• American Express
• Boeing
• Citicorp
• Ford
• General Electric
• Hewlett-Packard
• IBM
• Johnson & Johnson
• Marriott
• Merck
• Motorola
• Nordstrom
• Philip Morris
• Procter & Gamble
• Sony
• Walmart
• Walt Disney

We sold our house in Richmond Va and I would like to put some of the proceeds to work. I have an online brokerage and I could never really excited over the strategy for that basket, (energy). In fact, I have only established four positions, but am up a bit over 6% which is a blessing. Tonight I will close out those positions and begin the new basket. Now we need to establish the strategy.

Built to Last Strategy

Each of the companies listed is automatically on the watch list, but so are their comparison companies.  The ones that appear to still meet the criteria will have small positions opened, (large enough so that the trade fee is < 1%). We will use the observations in the book to determine how much of the basket any given equity will be added as well as the rules of the basket.

Rules of the Basket

• There are 18 companies on the original watch list, so we will say there is room in the basket for up to 40 equities, (if we include the comparison companies).
• Therefore, new companies that meet the criteria can be added to the watch list
• Therefore, new companies that no longer meet the criteria can be removed from the watch list and the basket
• Therefore, it takes extreme merit to exceed 5% of the basket
• Money may sit on the sidelines waiting for a buying opportunity
• Equities can, ( and almost certainly will), be present in other baskets
• Additional information such as dividends, fiscal responsibility including debt load, P/E, analyst recommendations, etc may be factored into the analysis, but the criteria take precedence.

Floating Rate Funds ( Fixed Income )

The SAMBX Prospectus explains that they mostly invest in senior notes, (loans to commercial enterprises). In the event of bankruptcy, senior notes tend to be near the head of the creditor line. Therefore, while the fund might lose some principal if a note fails, they should not lose everything as tends to be the case with stocks. There are still tons of gotchas so this is a very small part of the overall portfolio, but it has its place. Let's look at two charts, the first is a ten year comparing SAMBX and a fund that is based on US Treasury TIPS, (inflation protected bonds), VIPSX, 2007 - 2014.

Now, let's look at just one year with the same two funds. SAMBX looks a lot better against VIPSX. My thesis is that people are still discounting the potential of inflation.

I use SAMBX for two reasons, to manage volatility so I can sleep at night and also as a hedge against inflation. Now it is not clear to me that wither SAMBX or VIPSX can actually be a hedge against inflation. However, if people believe that they are and start buying these funds, that should increase demand and drive the price higher. If I can get lucky and the price goes up 20% and inflation is at 5%, then these really help. Let's do one last chart, to illustrate the volatility management piece. The new color, yellow is SPY, my proxy for the S&P 500. VIPSX doesn't drop as much in the great recession because most people expected the US Government which issues the TIPS bonds VIPSX is based on to survive. But in the great recession, there was real concern that companies might fail, which was not good for either SAMBX or SPY.

The SAMBX NAV as of:

4/28/14 9.02 Well, we wanted something to manage volatility :)
3/1/13   9.02
3/8/13   9.04
3/19/13 9.05
4/20/13 9.08
5/1/13  9.09 Woo Hoo feel the engine roar :)
5/17/13 9.10
6/13/13 9.01 Hmmm, time to buy more?
6/26/13 8.97
7/21/13 9.04 Kinda wish I had moved on 6/26/13 :) Oh well, I am still working so there is only so much time to do investments right now.
7/23/13 9.05
1/6/14   9.06 In the past 6 months this hedge against inflation is up by 1%, but my expense ratio is .6, before taxes and trade fees in investment is up .4%, beats a checking account I suppose.  And there is that cute little three cent dividend. We are going to stay the course.
1/24/14 9.09 Been 2 tough days for Mr. Market, so far SAMBX does not appear to be high correlated with stocks and that is always nice.
4/3/14   9.06


1/8/14 9.08  The Chicago Tribune just ran a story on floating rate funds, they mention:

• FFRHX
• PRFRX

Lets run a comparison against SAMBX, Google cannot locate PRFRX, so we will focus on SAMBX and FFRHX.

As it is easy to see they are highly correlated. The spread at December 2013 is kind of interesting.; can't wait to see where it leads.

1/10/15 8.75
That is not what I was hoping for there are two holes in my thesis. This strategy was to reduce volatility in basket Cs. It is not like it is swinging wildly, but I was expecting slower change. And of course I was hoping it would go up not down. This still correlates with FFRHX. No action required.

2/12/14 9.08

11/29/13 SAMBX is still at 9.05, but I am happy, it adds stability to the portfolio and gives me some protection against inflation. Realize there are NO signs of impending inflation, but when I can build a shield at a bargain, what is not to like.

Update 5/2/14 Fascinating article on the topic from Oregonlive.com.
Update 4/20/13 I found this article from a year ago and he mentions PRFLX and EVBLX.
Return for 1 year, expense
PRFRX +2.00%     0.85%
EVBLX +2.25%    1.02% with a front load of 2.25% Yikes!
SAMBX +2.60%   0.62%
This March 2013 WSJ article reminds us there are risks ( thanks ) but people are considering this as a hedge against inflation (thanks again :). And they mention:
OOSAX  +2.18%   1.06% with a front load of 3.50%
RPIFX    +2.08%    .55% (sounds great, but the minimum investment is a million dollars, even if I had that to spend that would be a lot of eggs in one basket )
NOTE: return for the year is NOT adjusted for dividends, or it would sound higher.

How we got started with this 3/2/13

I was ending a phone call with Sean Fowler ( Edward Jones Auburn WA) and he mentioned that I should look into a fixed rate fund as a hedge against inflation.

Thesis

This is a type of fixed income that can serve as a hedge against inflation, it is very common to see these rates float 2% ( or even more ) above the T-bill rate. They also have the potential to smooth out a portfolio. Take a look at this risk table from Google Finance dated March 8, 2013 for one fund SAMBX:

A negative Beta and a fairly high Alpha with an attractive Sharpe ratio is what I need a bit of right now. To be sure with a Beta of -0.24 it is very unlikely I will see gains ( or losses) of 5% in a single day, but it makes sense to me to try to build an overall portfolio that smoothes out some of the highs and lows. Why?

Mr. Market is Bi-Polar (Sidebar)

Just three months ago, we were being told the world is ending, not just the Mayan calendar ( it tells you something about human nature that this was the number one question people were asking NASA), but that we would all fall off the fiscal cliff in December 2012 and have a recession.


With apologies to Men in Black for taking them out of context:
Kay: There's always an Arquillian Battle Cruiser, or a Corillian Death Ray, or an intergalactic plague that is about to wipe out all life on this miserable little planet, and the only way these people can get on with their happy lives is that they DO NOT KNOW ABOUT IT!

In our case as retail investors trying to set up a retirement, we can know about it, but we can't let it get to us. Last week as the Dow Jones set new records, the doomspeakers were already lining up. Are they right, are they wrong? Heck if I know, but I know that investing from a spirit of fear leads to poverty fast. And yet I am a human being, I feel fear, I have intuition trying to help me invest, so starting to think about smoothing out the portfolio, seems to be a good plan. Less emotional input.

Back to Floating Rate Funds Thesis

They loan corporations money and require a premium on the interest. The interest rate floats based on some metric like the Libor.  Obviously, the performance of the fund is impacted by interest rates and Ben Bernanke has kept them as low as possible for a while. Therefore, the potential of these funds to go up when interest rates go up is fairly high.

There are a number of these funds, many are very expensive ( high cost expense ratio, the industry average is 1.21%), some are only available if you are invested in some sort of wealth management type of broker. Most are traded over the counter and you may be limited  in when you can retrieve your money, once a quarter, 15th of the month, that sort of thing, so this needs to be in the long term portfolio type of thinking.

Research

The clearest explanation I have found is this Investment U article. It is well balanced and talks about the pros and cons. I have been looking for a couple of days and doing my homework and have decided that I would like to open a position in a floating rate fund.
I was down to five semi-finalists today: SAMBX, FLYRX, AFRIX, CSHIX and HFRZX. In the end I selected SAMBX, it is not the top performer in 2012, but the expense is 0.62% which is about half of the industry average.

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.