VZ Added To My Long Term Holdings

I took liberty this afternoon to purchase VZ, on a whim, at $29.43.  The quality services of Verizon are, without exception, the only cellular communications grid worth utilizing, and with a respectable dividend of roughly 6.5%, the purchase makes for an excellent use of margin.  I typically avoid the technology sector like a Dark Age epoch village; I rarely feel the endurance needed to put up with the sector’s styling, most closely reminiscient of fads.  But, I admire Verizon for having developed a superior network that would be remarkably hard, if not impossible, to replicate.

I’m toying the idea of covering my NOV short for a quick 3% gain.  However, I don’t want this position to pull a BHI on my unsuspecting person (I guess I should have held out a while longer; it’s pushing past $42, and I happily settled at just under $38).  As of right now, I’m in possession of the nerves to hold out until next week.  That could abruptly change though.

I have been busy looking over my books this afternoon, and have noticed that my shares of RSO have now passed into the realm of profitability, for me.  Despite still being down 15% or so, I have, for many wondrous days now, been collecting 20% dividends.  As such, I have already accrued a 4% profit on my principle.

Needless to say, I did not spend the better part of two years tying up a nice chunk of cash to make some pathetic 4%.  However, should this near inhuman rally succeed in appreciating my shares to the $6 mark, I will have made serious return, al la dividends.  And I’ll probably drop this shit like radioactive waste too; unlike the rest of the vermin who seem to make up the market place, I can fucking read.  They’ve been paying those dividends by heavily selling assets and diluting shares.

However, despite the considerable risk I undertook, I’d have to call this purchase a smashing success.  It’s time to get drunk and celebrate this weekend at a local German-American take on Oktoberfest.

I took a short stake in NOV again this afternoon, at around $44.37 a share.  That thing has gone near parabolic, and all built on rumors of some glorious partnership with Petrobras (PBR).  Oil prices just don’t justify this movement and PBR is full of all sorts of promises it will likely never keep, so to hell with it.  Even on a good day where this partnership will inspire all sorts of new profits, NOV is only worth somewhere in the high $30s, and much less if you care about book value.

I dropped comment on one of the Fly’s posts this afternoon informing the audience that I sold out of BHI at $37.81 a share for a solid gain of 6.4%.  I am almost thus able to carry forward as if I hadn’t purchased and mishandled CAT but a week before.  Sadly, for this large gain, position sizing is as important as percent returned  Let that be a lesson to all; do not appropriate significance to lackluster ideas.

Seeing the day end, I probably should have stayed into the name for at least an hour or two more, but I’m seeing unfamiliar territory in the ever important relationship between crude futures and oil names.  One of these must inevitably revert to the other’s direction and, given recent history, this will probably be crude prices rocketing to a new year high.

However, seeing myself up a respectable amount and playing with credit facilities as I am, it makes no sense to kill myself for some infinitesimal extra percentage of my overall portfolio while the broad volatility of this market perseveres.  Rather, I shall wait patiently for the next set up to reveal itself to my advantage.

Sadly, my fall back plays of gambling on direction in the oil markets have been disturbed by this new action in the futures market.  I cannot, in good faith, short an oil service company, say NOV, while oil prices are so low to what they are capable of; no matter how much higher they may have risen in recent days.  I need to find a good wall with which to keep my back against, so that I may lash out with the greatest probability of success.

When Schlumberger awoke this morning, sharpened its scimitar, and went out to face the day, it did so with the malicious intentions of carving out the hearts of any that stood in its path.  This stock has been on a hell bent path of furry all morning, its ally Baker Hughes faithfully by its side, and I am patiently following behind it, shaded in a war tent, dining on hummus and smoking hookah, as they cut their way forward, leading me into the promised land.

My shares of SLB have a $41.80 average cost, accumulated in the long lost days of yester year, easily my largest held position, and right now they seem to be up 46.8% year to date.  And if I see my way, that’s just the beginning.  I have every intention of holding onto these shares back until oil tops $100 per barrel (it will happen, sooner or later), with a keen eye on the date of October 30, 2009, when my first round of purchases become classified as long term holdings.

When that glorious day is reached, my shares will start shedding tax obligations like clothing in Cancun around the end of March, and I’ll break a fifth of Patron and a bottle of cactus juice out, and start bidding to have Ted Kennedy’s house leveled to make room for a Thalerland amusement park.

For the meantime, my target for BHI is somewhere above $38.  As to when I’ll drop the position exactly, that depends on the feel I get from the market.  Sentiments seem to have improved tremendously from where they were a few weeks ago, and I know oil can go higher in the face of this ever weaker dollar; that should translate to new highs for BHI, which means well above my target, $39 or even $40 should be attainable without much risk of a pullback in between.  However, I’m ever wary of the bi-polar characteristics of Americans these days, and may pull the plug sooner, for easy money.

However, eager to celebrate my kick ass new wealth, delivered by the hands of the French no less, those cheeky bastards, I loaded up on Altria this morning at $18.14 a share.  The beautiful thing about that stock is, compared to my margin interest rate, the dividend yield is still high enough that I can buy up large quantities, use the yield to pay off my interest, and still pocket a small profit.  It’s basically a safe bet, and wonderful use of margin.

I just wish now that I had loaded up on NRP instead of waiting for it to break $17.  Now it’s breaching $19, and I’m jealously sitting on a 10% loss as opposed to a delectable gain.

Lord I have been busy for the past few days, catching up on work accumulated in my Labor Day absence.  That is likely the true meaning of Labor Day; taking that break makes a lot of fucking labor for me.

I will take a minute, however, to share my enjoyable weekend with you; not because it is inherently insightful or contains any life lessons that you may find useful, but rather because now and again it is nice to take a break from research.

As some of you figured out a time ago, I am a Michigan resident; from the motor city metropolis, no less.  I only reside there half the year, however, and spend the rest of my time in a summer home, in the north.  Then this year, I took a nice weekend to go to the one, Traverse City.  If you are unfamiliar with our geography, Traverse City is in the northwest corner of the lower peninsula.  It is a decent sized city of roughly 40,000 located at the furthest inlet of a large bay.  The area is a lush habitat of rolling hills hiding many lakes and rivers, and home to a large agricultural industry.  It is best known for its cherry orchards around which the Cherry Festival is held each year.

We went up with the intention of tasting the local wines at the many vineyards which have sprung up over the last decade.  The journey to the vineyards tends to take you along the length of the bay, a deep blue of soft waves on which white sails of ships contrast tranquily.  Each of the vineyards themselves is a beautiful location built around old, stone buildings, and great wooden architectures well worth investigating in and of themselves; looking on the great landscape below the hills they were cultivated on.  Fresh, cool breeze from off the Great Lakes as a warm sun beats down on the back of your neck; resting in the shade, sipping on a glass of wine, while eating crackers with goat cheese and gazing at the grapes, still growing on the vines.

As to the wine itself, the area ferments some of the best; Riesling, Pinot Grigio, Pinot Noir, Gamay Noir, and Rose, to name a few.  Champagne is also plenty to be found, with each vineyard hosting their own specialty.  This year, the Late Harvest Riesling was easily the most popular; an exceptionally sweet wine with a full flavor, and a price to match.  Each location had especially reserved this delicious harvest.

If you should happen to go there, remember the words I’m about to tell you.  Many vineyards have sprung up since the 90’s, when wine making became increasingly popular to the area.  But of all the vineyards, Boskydel is the best.  They were there before any others, and will hopefully be around long after.  So cultural is their wine making that there really isn’t any marketing for them; the location being something of a local secret.

You can find the way by asking people at the other vineyards; the employees will know.  There isn’t much of a marker at the farm itself, with only a crudely painted sign and a mailbox with the name printed on it.  Should you happen upon it when they are supposed to open, or right before they should close, don’t bother.  The owner will likely have already shut down for the day.

As you pass through the gate towards the lone barn that makes up the grounds, you go by a sign pardoning the patron of transgression made through limited service.  As you park your car and enter the lobby, scarcely more than a poor clerks office cluttered with memoirs collected over at least one mans lifetime, you are greeted only by the silent observation of a lone onlooker; an old man by the name of Bernie.

Bernie, with his family, brought winemaking to the Traverse City area and he is, without doubt, the best.  Don’t be alarmed by his unsociable ways.  He won’t greet you are ask about where you’re from.  He won’t care where you’re going.  And he won’t offer many words other than an occasional murmur of understanding, when you inquire about tasting his wine.

One of my companions, who had been there many times before, attempted to grant him praise as the best winemaker around.

“That’s a matter of opinion.”

As he reaches outward with the bottle, an old hand unsteadily holding grip, his opposite hand extends a single, thoughtful finger outward, pressing gentle beneath the bottleneck and enabling him to pour exactly the right amount.

You look, now quite silently, at his prices, hung up on the wall behind him, all under $15 a bottle and exorbitantly cheap.  He chuckles to himself if you ask about his discount for a case of wine.

“15% off.  That’s our stimulus.  Ours works, Obama’s doesn’t.”

While we’re trying his wines, all contained in glass bottles that seem lackluster, perhaps even bordering on amateur in appearance, a large group of people come in behind us.  Counting to more than eight, Bernie asks some of them to leave and return later.  He is, after all, just one aged man and his wine.  But then, when you’re a legend, you don’t have to care about your customers.

The wine is rather exceptional, and our group bought a good amount of it.  The journey to Boskydel’s to visit the charming Bernie is easily the highlight of any trip to Traverse City.  As we left, I took notice of a single sign that hung on the wall; a quote to the effect of:

“Drink good wines habitually, and fine wines occasionally.”