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Lemley Yarling Management Co
15624 Lemley Drive
Soldiers Grove, Wi 54655
Bud: 312-925-5248       Kathy: 630-323-8422

April 25, 2014

Model Portfolio Value As of 25 April 2014

$ 738,176


Comment on Model Portfolio activity

We remain all cash. Markets are having trouble maintaining their all-time highs and the tech hot stocks are a bit cooler after a few weeks of profit taking. They have further to go on the downside. Quality stocks remain expensive.

Our son in law with the Tommy/Teresa Turtle who lives in a pond on the farm. He/she pulled his/her head back in and headed for the mud after this picture.


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April 18, 2014

Model Portfolio Value As of 17 April 2014

$ 738,061


Comment on Model Portfolio activity

We did nothing this week. We are in cash and watching. The markets recovered last week’s losses but the momentum is not there. At least for now.
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April 11, 2014

Model Portfolio Value As of 11 April 2014

$ 737,834


Comment on Model Portfolio activity

When the markets didn’t turn around decisively on Tuesday after four days of losses we decided to raise cash and head to the sidelines. We planned on doing this in May but the recent action in tech stocks and other high flyers suggested caution at this time was the better way option.

For the last few months we have been trying to catch the tail end of a very strong up move but now a move down seems as likely as an up move with the downside risk greater on a percentage basis. We are not predicting the end of the world just the arrival of a much needed rest for the markets.

We took profits and losses including a large loss in GM.

The brouhaha on the recall issue is affecting the share price and the news and media attention is going to continue for a few more months at least.  We think it is better to be out than in but may revisit.

The other trades were just that and now we need to settle back and watch.
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Todd Harrison is the editor/publisher of minyanville.com a pay for financial website that we have subscribed since inception back in 2002.  He posted these thoughts on Thursday.

Todd Harrison: The Bull's-Eye on the Back of High-Frequency Trading

The stock market will be the judge and jury.

Todd Harrison   10:11 AM EDT, Thursday April 03, 2014     

Editor's Note: Todd posts his vibes in real time each day on our Buzz & Banter where subscribers can follow over 30 professional traders as they share their ideas in real time. Want access to the Buzz plus unlimited market commentary? Click here to learn more about MVPRO.


I attempt to view the stock market one stair-step at a time when trading, and focus on what I see as opposed to how I feel.

I will share, however, that the mainstream mindset seems to be asking two questions: "When do I buy?" and "Why would I sell?"


This tends to happen toward the tag ends of a move higher.


Yes, the charts point higher,
perhaps to S&P (INDEXSP:.INX) 1960, and momentum has rewarded the dip buyers time and time again -- although momentum stocks have had a change of heart, which we must respect -- so take all technical analysis with a grain of salt.


I do believe there is more to the unnatural markets than most people think, and it is feasible that HFT = subprime = dot com.  While many believe HFT is a natural evolution of free-market Darwinism, there is a camp that believes it is entirely more pernicious. 

We've said it before and we'll say it again: the stock market plumbing is all screwy, and most high-frequency trading operations -- and many investors, for that matter -- only know a straight-up tape. 


Time will tell of course, with the stock market serving as judge and jury.  We indeed live in interesting times.


Random Thoughts:

  • The hip bone is connected to the jawbone as ECB President Mario Draghi hinted at "unconventional measures" once again this morning.  I can't help being reminded of Fed governors who repeatedly talked up the tape prior to QE1, 2, 3, and QE-finity.

  • The tape has been doing its best Teflon Don impersonation, with the S&P (1850), Nasdaq-100 (INDEXNASDAQ:NDX) (3640), Dow Transports (INDEXDJX:DJT) (7600), Russell 2000 (INDEXRUSSELL:RUT) (1182), and KBW Bank Index (INDEXSP:BKX) (71.50) all pointing higher, perhaps to the S&P 1960 target. …

  • …..Well, let's call it two flies as the biotech complex along with the high-beta realm continue to act funky. The ability of the broader tape to hold tough in the face of it -- sector rotation vs. outright migration -- is on the margin bullish, although we must respect the potential that it's a leading indicator for risk appetites.  IBB (NASDAQ:IBB) 217 is the 200-day, for those who watch such things.

  • I'm more than halfway through Flash Boys, and as I chew through the belly of the book, I find myself longing for simpler days when the markets were pure and free (yes, it's all relative).  Maybe I'm showing my age; or maybe I'm one of those old guys I used to see floating around the Morgan Stanley (NYSE:MS) trading floor. Can't say for sure; on the one hand, I'm 44 years young; on the other, this is my 23rd year reading the tape.

  • I recently shared my sense that the former execs at NYSE made a savvy sale to Intercontinental Exchange (NYSE:ICE), but time will tell.  ICE is down 13-14% from this year's high but still up 286% from the March 2009 low, so you be the judge. I see more competition and increased regulation in the space as well as the potential for the damning psychology that put a bull's-eye on the back of the banks during the financial crisis to target this complex.

  • Denial, migration, and panic are three phases of the emotional continuum.  See if you can identify where we are on the chart below. http://image.minyanville.com/assets/FCK_Jan2013/images/LC_March2014/denial1.jpg

  • It's April 3, 2014 so make it count; it's the last one of these we'll ever see. Good luck today.

R.P. 11 A

 

 

April 4, 2014

Model Portfolio Value As of 4 April 2014

$ 750,078


Comment on Model Portfolio activity

During the week we added Citrix Systems which we traded profitably earlier this year.

We remain invested with a May timetable to raise some cash.
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