Joined Jan 1, 1970
509 Blog Posts

Call Volumes Up

I’m starting to hear from industry insiders that incoming call volumes are increasing and are at record levels, in some cases, at mortgage companies and banks all over. People are calling around shopping for rates. With mortgage rates approaching 5%, is business starting to pick up in the housing sector?

Chew on that for a bit.

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REIT Update

Thanks to the stupid shoppers at the malls, I was up over 5% today in the hedged REIT strategy.

Ticker  Shares Cost Basis/Sh Cost LAST Total Position (FMV) % ▲ Gain (Loss) %CHG TODAY $ GAIN (LOSS) TODAY
MAC 80,000 $8.28 $662,400 $13.20 $1,056,000 59.42 9.27 $89,587
CBL 267,100 $2.65 $707,815 $4.16 $1,111,136 56.98 11.53 $114,870
BXP 18,900 $37.12 $701,568 $43.77 $827,253 17.91 (0.70) ($5,832)
SRS 26,000 $44.39 $1,154,140 $31.47 $818,220 (29.11) (4.32) ($36,943)
      $3,225,923   $3,812,609 18.19 5.01 $161,681

One has to wonder how long this will continue. I’m now up over 18% in spite of the egregious presence of SRS in the mix.

Due to the insistence of these mall REITS continually going up, I lightened my load of SRS by 7,000 shares at $31.383, because it mocks me.

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Alpha Buys

I’ve been quietly trying to accumulate shares today, and have met my goals.


75,000 MIC @ $2.035

100,000 OWW @ $1.5027

36,000 GNA @ $4.323

10,000 ENER @ $15.58

15,000 ME @ $9.335

Do not take this as gospel. Trade at your own peril.

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What’s Next?

Pity some of the poor hedge fundies. They’ve been fighting this rally and have gotten their heads handed to them. The WFC news last week didn’t serve them well either. Reloading the shorts here could be virtual suicide. The question then becomes, “when will they capitulate and buy into this thing?”.

Look for retailers to continue to post good numbers, especially ARO, BKE. CHS and KSS. People are also itching to ride the roads, wind blowing in their hair, so check out HOG.

Tech is moving nicely, even the old names like INTC, ORCL and YHOO (who is renewing talks with MSFT).

Also, the base metals are moving higher, as I mentioned in last nights post. In this space, I like FCX.

Be cautious on GLD, however. The technical trend is down since February. Even India is refraining from buying gold since the IMF is advocating selling. There’s also risk that a number of emerging and developing countries may be selling gold to raise cash, especially when they see it melting down.

We could see gold at $750 sometime this summer. However, there could be a short-term play before then, so I would be a buyer of gold on a bounce to $900.

What do the bulls need? They need the Dow to breach the 8500-8600 level in the next couple of weeks. Should it do that, the next long term resistance is at about 10,500. In addition, were this to happen, we could possibly end up looking back at this past February-March 2009 as “the bottom”.

Remember, however, that the future is uncertain. Trade accordingly and only risk what you’re willing to lose.

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The base metals look interesting from the standpoint that they rise before global economic activity rises and fall before economic activity falls. Since I’m bedridden and too lazy to tell you, you’ll have to look it up for yourself and figure out what they’ve been doing.

It would also do you well to check out how platinum and palladium are doing lately. These two are probably the most industrialized metals of all, as they have a number of uses, including catalytic converters and water purification.

What could they possibly be telling us?

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El Cheapos

A while back, I explained my strategy of bottom fishing low-priced stocks after a huge market sell-off like we got from the first week in February through March 9. The risk / reward / Costanza coefficient of asshattery is just too good to pass up. Just remember this when we hit the next bottom. Keep going back to this wellspring of prosperity.

That said, it ain’t over ’til it’s over. In other words, do you hear any 300 lb. ladies in Viking hats singing Wagner arias? Exactly.

Don’t make the mistake of selling this thing short, too soon. As you may recall, I sold out over 30 stocks near the end of March, harvesting 21% in two weeks, because I had a hunch things were going to turn south. I cannot bear to even eyeball the returns I’d have now, if only I’d let them ride. I ventured a painful peek and I think it would now be north of a 76% gain on the 30 stock portfolio in less than a month!

“If only….” .

Those are words to beat myself up by. But I won’t. (I always win fights, so it’s not fair). There will be more opportunities in this wonderful and volatile market.

So my advice to you is: let the big dogs run. (Ok, now I probably just top-ticked this rally, right?). In the case of “El Cheapos”, let the little dogs run until they blow the doors off the big dogs. Case in point, I bought FOE last Friday at $1.68467 average cost. It closed today at $2.93. Up 73%. The percentage is what counts. Only the decimal points determine whether it’s a big dog or a little dog. Any big cap/big dog stocks you know make 73% in a week? However, there have been tons of “El Cheapos” that are rocketing up 50%, 75%, 100%, 200% in the past 3 three weeks alone. Get my drift, Einstein? Stick with the little guys for now. If this is the bottom of the market, and we’re rallying back from death to comatose, these could be buys of a lifetime.

There are still some cheap stocks and funds out there, especially in the REIT sector:

[[SRO]], $0.54 ( +100.00% since 03/09/09)

[[RQI]], $2.87 ( +93.29% since 03/09/09)

[[NRO]], $1.55 ( +91.40% since 03/09/09)

But don’t take my word for it, do some research of your own. Many cheap low-priced stocks are selling at fractions of book value. We haven’t seen this kind of environment in well over 50 years, maybe even since the Depression. Get serious and start digging. Recognize that crisis does also translate into opportunity for those smart enough to work at finding the bargains of a lifetime. They are out there people.

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