October, 2011

'If asking a billionaire to pay the same tax rate as a Jew, uh, as a janitor makes me a warrior for the working class, I wear that with a badge of honor. I have no problem with that. '

~  (The Teleprompter addresses the Congressional Black Caucus awards banquet, Sept. 24), 2011

The Professional Opinion

DJIA: 10913.38


Buy Recommendations

Suncor (SU)
when you can get it under $33.00 a share 

Comment: It's definitely under $33.00 a share now................

Job Related - Sunset in Massachusetts with the new Brayton Point cooling towers in the background. 

Personal Portfolio
Dividend payers are still leading the way.  About 33% of the portfolio is focused on dividend yielding stocks.  Treasury bill rates are so low that people are being forced into higher yielding paper - junk bonds, stocks and so on.  Might be an idea to pick up cheap stocks yielding safe dividends.  You might get some growth and income.

Well looky here!  Barry's got a new bill!  

I've got a job for Barry - lets see if he can keep his big job killing mouth shut  until the next election - giving the markets , banks,  big and small business some much needed breathing room.  If he can't keep it shut, perhaps Michelle can keep it crammed to capacity with celery stalks, peas and carrot sticks.

09-21 - A Red Letter Day for Barry's administration.


Personal Portfolio

Back into Huntsman (HUN)


Last year Huntsman bought me a new fence,  dramatically increased the value of my 401K  and the investment account.  

This year Huntsman got creamed because they missed earnings by one penny.  It was quite the sight to behold.  Even Jon Huntsman was amazed and ended up buying a bunch of shares.  Last quarter was the second best in Huntsman's earnings history.

I ended up taking a 4%  position in Huntsman again with a cost basis in the low 12's.  

If you are interested in some growth with a little income,  I'd consider Huntsman.  It has improved its balance sheet and its PE has been brought back to earth.

Spousal Education 101

How many times have you heard horror stories about people whose spouses died,  where the spouse who died managed the finances  and the spouses left behind got raked over the coals by unscrupulous  predators in the financial world because they relied on their partners to take care of the money.

It's not much different in this household either but we are currently working on rectifying that by setting up an investment account whereby the spousal newbie investor to the investment world is in charge of managing a real account with real money.  The new investor has an additional incentive to learn the basics because it's her money.

The first basic question is, 'What do you want to invest for.....Speculation?, Income?, Growth?,  Value?, a combination?'

The answer in this case was  75%  moderate growth with dividends reinvested in more shares,  and 25% speculation.

The question next becomes, 'What  companies do you want to invest in, and what criteria are you going to use?'

I suggested looking first at companies that were familiar,  had a decent balance sheet,  reasonable PE and got creamed because the teleprompter once again flapped its jaws.  These would be considered Value investment picks.

And these are what my wife ended up with:


Costco Wholesale at  $76.67 

Reason:  She likes Costco.  Costco is also expanding overseas.  Its PE is reasonable, it has a low beta and it does  pay a small dividend.  I'd call this a slow growth company with a stable outlook.


Progress Energy at $45.61

Reason:  I am familiar with the company and they are expanding.  It has a very low beta and pays out  a very decent dividend.  Make this a company where one in this environment would expect growth and income.


Huntsman Corporation at $11.71

Reason:  Huntsman has always treated me well and their bottom line has been continually improving.  Being able to buy this stock at near its 52 weeks lows is a gift, in my opinion.  Decent  yield at these prices too.  With a beta of 2, it will move - and hopefully to the upside.  This has the possibility of significant share price appreciation and is a bit more speculative.


MGM Resorts at  $12.52

Reason:  Frequently overlooked are companies in your own backyard.  We have been to MGM many times and like the resort.  An additional selling point for me was a TV edition of 'Underecover CEO', which featured the new company CEO.  The company has significant business ties overseas which is helpipng fuel the bottom line.  This is to add some juice to the portfolio so I'll call this specualtive growth with a beta guaranteed to take you on a roller coaster ride.

My only regret is that I could have got it cheaper but 12 and change is not bad.

A Trading Strategy that Sometimes Works in Markets  like what we've been seeing:

This has worked for me before and hopefully it will work again.

1.  Own one stock that does well in periods of volatility - holds its value well and has a low beta.  The stock in this case is NLY, a REIT.

2.  Own another stock that that has a high beta and really moves during volatile periods.  This stock is Huntsman,  a chemicals manufacturer.


I sold half my shares of NLY during the sell-off and during that time the stock was actually still in the green.


I bought Huntsman at 10.16, which was trending down almost 10%

My hope is that by September 29  the market will recover and I will have Huntsman sold for a good gain and bought back more shares of NLY just prior to the dividend distribution date. 
REIT's generally drop somewhat in share price when the market rallies  so odds are I'll be getting NLY at a lower price than what I sold it for. That would be a icing on the cake.

Odds of that happening……….. better than one might think.


09-22 - Another Red Letter Day for Barry's Administration

I hope the clowns that voted for this chucklehead the first time around are starting to finally get a clue.

Minden, Nevada

Storm clouds are coming - an unusual summer squall centered around Minden / Gardnerville, Nevada.