Bud's Poem Page
  Katie's Route 66 Blog
  Katie's Coast2Coast Blog
  Katie's West Coast Blog
  Katie's East Coast Blog
Lemley Yarling Management Co
15624 Lemley Drive
Soldiers Grove, Wi 54655
Bud: 312-925-5248

Comments on activity in client accounts

7 December 2018/ Pearl Harbor Day

https://www.washingtonpost.com/history/2018/12/07/us-was-looking-enemy-near-pearl-harbor-it-was-looking-wrong-direction/?utm_term=.4b63e23060be

Well, no one ever said it would be easy. We continue to invest in stocks that offer value and we have expanded our universe of issues owned to include large Cap companies that have been under pressure. With markets flat on the year the shares we own and are purchasing are down 25% to 50% from their highs this year and many are at multi-year lows.

We can't predict what Trump will twitter next. But it is obvious that the big boys and girls and their computers are having fun with his tweets that are roiling markets as their computers feast on volatility or at least are the proximate cause of the 2% intraday movements.

Coupled with the rush to the doors by FAANG (Facebook, Apple, Amazon, Netflix, Google) holders (and other wonder stocks) who bought the hype and are now reaping the losses or longer term holders who are attempting to lock in still remaining prices the mood of Mr./Mrs. Market remains sour. Interestingly- with the major market measures flat for the year, the go go stocks (1960s term) are all coming back to earth. Apple is down 20%, Facebook -40%, Amazon -20%, Google -20%, and Netflix 20%. Square is off -30%, Roku -40%, Alibaba -25%, Nvidia -40%, Applied Materials -40%, Salesforce -15%. All except Google and Apple are still priced for perfection but the pain is real for many day traders who didn't hop off in time.

There is pain even for those of us who didn't chase the rainbow but felt many stocks were fairly valued. Those stocks we bought are now more fairly valued. ☺

the possible inversion of interest rates (short term rates are higher than long term rates- for example a two year maturity Treasury would have a yield of 3% while a ten year Treasury would have yield of 2.9%) the mavens are worried about recession because past inversions have preceded recession. our take is that in past cases interest rates were twice what they are now and inversion was more meaningful because of that. Also the increase of computer trading and algorithmic computers programmed to make decisions on past data can create inversions trading without affecting the economy.

Coupled with yearend tax loss selling and portfolio primping the markets are volatile and the Trumpster is not helping.

As with Mexico and Canada we think Trump will continue to create his daily reality shows vis a vis China but in the end he will settle with Chairman XI and declare the best most wonderful all-time stupendous trade deal ever negotiated in the history of the world and Universe. Until then volatility remains.

We currently own:

AT&T: down 30% from its yearly high, priced at 10X and yielding 6.3%.

GE is off a bunch and in the dog house. It is an oversize position that we will reduce in the New Year when selling pressure abates and its share price rises. Why GE is priced where it is:

https://www.bloomberg.com/news/articles/2018-12-06/investors-are-sick-of-waiting-for-ge-s-desperately-needed-reboot?srnd=premium

Bristol Myers Squib: - 20% and prices at 13X with a 3% yield.

Caterpillar: - 30%, 8X and 2.7% (traded twice already for 10% profits each time)

IBM down 35% 8X and 4% yield. Has as large a cloud business as Microsoft and Amazon and earns real dollars. Down in part because Buffet sold.

Whirlpool: down 35%, 8X and 3.8%.

International Paper: off 20%, 8X and 4.4%. Think Amazon boxes.

Goldman Sachs: lower by 35%, 7X and 1.7%

BankAmerica: off 20%, 10X and 2.6%

QUALCOMM: down 20%, 14X and 4.4%.

Micron Tech: down 40%, 4X and 3.6%.

AMD: -35%, 40X and 0%.

Western Digital: -60%, 6X, 4.7%.

3D: -42%, ~X, 0%

Abercrombie: -30%, 20X, 4%.

Chico's: -35%, 17X, 4%.

The Gap: -20%, 10X, 3.2%.

Marathon Oil: -25, 20X, 1.2%.

Apache Oil: -30%, 16X, 3%.

Devon Energy: -33%, 17X, 1.1%.

Hain Celestial: -40%, 16X 0% 15 year low.

Ford: -30%, 6X, 8%.

Ascena Retail: -42%, ~X, 0%.

*****

The story below suggests stock picking has underperformed broad market ETFs for the third year in a row.

https://www.bloomberg.com/graphics/2018-shrinking-hedge-fund/

*****

 


Comments on activity archives

2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001

FAIR USE NOTICE

This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner.


Website Information

Check the background of this firm at https://brokercheck.finra.org/

For Information on RBC LLC SIPC and Excess SIPC protection https://www.rbcwm-usa.com/legal/rbc-cs/cid-319579.html.

For those clients of LY & Co and other interested persons the Quarterly Report on the routing of customer orders under SEC Rule11Ac1-6.
For Quarter Ending 09/30/2002 For Quarter Ending 12/31/2002 For Quarter Ending 03/31/2003
For Quarter Ending 06/30/2003 For Quarter Ending 09/30/2003 For Quarter Ending 12/31/2003
For Quarter Ending 03/31/2004

All SEC Rule11Ac1-6 Quarterly reports up to March 2, 2012 may be found by visiting the diclosures at LY& Co Clearing Broker Mesirow Financial at: http://www.tta.thomson.com/reports/1-6/msro/.

From March 2, 2012 forward all SEC Rule11Ac1-6 Quarterly reports may be found by visiting the website https://www.rbcwm-usa.com/legal/rbc-cs/cid-360855.html.


Annual offer to present clients of Lemley Yarling Management Co. Under Rule 204-3 of the SEC Advisors Act, we are pleased to offer to send to you our updated Form ADV, Part II for your perusal. If any present client would like a copy, please don't hesitate to write, e-mail, or call us.

A list of all recommendations made by Lemley Yarling Management Co for the preceding one-year period is available upon request.


Business Continuity Plan

https://www.rbcwm-usa.com/legal/rbc-wm/cid-277883.html?_ga=2.135033585.173888424.1512949149-1756823932.1512949149

15624 Lemley Drive Soldiers Grove, Wi 54655 312-925-5248
The factual statements herein have been taken from sources we believe to be reliable but such statements are made without any representation as to accuracy or completeness or otherwise. From time to time the Lemley Letter, or one or more of its officers or employees, may buy and sell as agent the securities referred to herein or options relating thereto, and may have a long or short position in such securities or options. This report should not be construed as a solicitation or offer of the purchase or sale of securities. Prices shown are approximate. Past performance is no indication of future performance.