October 31, 2014
Comment on Model Portfolio activity
What correction? The markets
ended the month on the upside on News that Japan is going to begin buying bonds
ala the U.S. Fed and also is going to move $400 billion into world stock
markets.
During the week we traded
Verizon for a dividend better profit and added to Juniper, Huntington Bank and
KB Homes.
All is grand in the land. If
the Republicans win the Senate the ensuing rally should mark a short term top.
By the by, what happened to Ebola, and Russia, and
the European doldrums? Talk about ADHD, these markets and the big
boys and girls have it in spades.
*****
October 24, 2014
Comment on Model Portfolio activity
The correction seems to have
satisfied itself as a quick 10% down move. Unfortunately the out of favor
stocks we favor are not participating in the rebound yet.
During the week we took a
large loss in Cree- it hurt. But we have had a few good trades this year to
offset that loss. We added to Sprint, Alcoa and Old Second Bank. We also repurchased
Verizon and more AT&T and sold Chico’s and
Coach for wash trades.
We bought Urban last week and
earlier this week when it dropped 20% but when Abercrombie dropped $2 on Friday
on an analyst cut we bought more shares and sold Urban for a wash. We would
rather have a larger position in ANF
priced at half of sales. We have made good money trading Abercrombie this year
and we’re just early on this last trade.
We
bought an equal amount of GM warrants with the Urban money. GM remains in the
doghouse but we consider it real value.
*****
October 17, 2014
Comment on Model Portfolio activity
This
week the market completed a 10% correction on Wednesday when the DJIA drop 400
points before rallying a bit into the close. Then on Thursday morning a 206
point drop and then subsequent rally successfully tested that correction.
Ebola,
ISIL.
European recession, Greek bonds crashing, and other nefarious events were all
the news and all the rage as the high frequency volatility had their best week
in months... on Friday stocks rallied as the realization that - Ebola may not
kill everyone in Texas, the hope that Europe governments would spend some
money, - the bombing in Syria was showing some success and the big boys and
girls deciding to go long or at least cover their shorts - led to a 1% rebound.
Stocks
are still not out of the woods and another test would be positive but for the
moment the tsunami tower has been arrested.
During
rent week we sold Chico’s and Deere at losses to redirect that and additional
money to more Whole Foods, Huntington Bancshares, GM common and warrants, Ascena,
AT&T and Coach plus the repurchase of Verizon and the addition of Urban
Outfitters (down 15% on Friday), and Hecla mining as a silver speculation.
We
still have a bunch of cash ready to deploy if the 10% correction turns into a
20% wipeout.
The
economy is fine, employments numbers are super, company health is very good and
the correction we expected and the market needs are occurring. Not to worry.
It’s all about the journey.
*****
October 10, 2014
Comment on Model Portfolio activity
Three weeks ago all was wonderful and all news was positive.
Currently all news is negative and stocks are overpriced. And so it goes with
the markets. Volatility has increased and bearish bets are being placed.
We have been awaiting a correction for it seems like
forever. But now that it seems to have arrived we don’t like seeing account
values decrease any more than the next person. Happily we have large cash
reserves which we have been slowly putting to work and at that same time we
have pruned holdings to take advantage of perceived better options.
During the week we sold Post for a too large loss and placed
the funds in GM common stock. We also sold Alcoa flat and added to our GM
warrant position as well as adding shares of J.C. Penney that dropped on
reports of flat September sales. Those actions were switching from less
aggressive to more aggressive position.
We are not surprised by the sudden change of sentiment-
that’s how corrections correct.
*****
For those clients of LY& Co and other
interested persons the Quarterly Report on the routing of customer orders under
SEC Rule11Ac1-6.