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Lemley Yarling Management Co
309 W Johnson St
Apt 544
Madison, WI 53703
Bud: 312-925-5248

Comments on activity in client accounts

6 August 2022

We are back from our two weeks off. Most accounts (except for some of the smaller ones which are more volatile up/down) have moved back into positive territory with many up 3% to 8%. We continue to trade earnings misses when the subject stocks decline 8% to 10% on what the gurus consider disappointing earnings or revenues or forecasts.

We currently own the Domestic Oil ETf (XLE 3.8%) and Apache Oil (both for trades after the 30% pullback in their prices and correspondingly, the price of oil).

We have established a core of holdings- many of which pay 3%+ dividends and are near yearly lows and/or are unloved by the talking heads. For the present, those issues are: Verizon (5.8%) and AT&T (6%) which are both oversized holdings for their dividends. We also own Google and the Cloud ETF (CLOU). Also, Dow Chemical (5%), CitiGroup (4%), BankAmerica (2.5%), Pfizer (3.2%), Cisco (3.4%) Intel (4%) Western Digital, Walgreens Boots (5%) AMC Networks, Ford (4%) and Snap.

Having reduced our retail holdings ahead of earnings reports later this month and next we continue to hold Macy's (3.8%), Abercrombie, Under Armour and The Container Store.

We have been trading (mostly for profits) a number of retailers and fallen angels including: Ralph Lauren, Best Buy, Bed Bath, Nordstrom, American Eagle and Urban Outfitters. Other trading issues are IBM, Disney, Kraft Heinz, Comcast, Shake Shack, Twilio, Energizer, Hain and GM. And we are looking for entry points on Hain, Kyndryl (IBM spinoff) and Organon (women's health Merck spinoff).

We abandoned Paramount Plus for another too large loss. The karma is not right with that stock.

As we stated three weeks ago, we considered the 20% pullback in the large cap components of the S&P 500 and the NASDAQ 100 to have been enough. So far that has held true. Many of those issue substantially higher. More than a few seers are warning that this is a bear market rally. We are agnostic. We have found that predicting is for the talking heads. We are much more comfortable reacting to the what the markets signal on a daily basis. That strategy has been working for us for the past 4 years and has helped us to avoid large down drafts.

*****

Of interest:

Great jobs number – Market drops!!! Only Wall Street traders would think that folks finding work is a bad thing.

The US economy added 528,000 nonfarm payrolls last month, the Bureau of Labor Statistics announced Friday. Economists surveyed by Bloomberg anticipated a gain of 250,000 payrolls. The print shows job growth rebounding from the month prior as labor demand held steady through the summer…. The June increase was updated to 398,000 payrolls from 372,000. The May count was revised to a final count of 386,000, up from the prior total of 384,000 jobs.

Overall employment now sits above the levels seen just before the pandemic hit. Several sectors, including the government, have yet to fully rebound, but changes to the economy and how Americans work will likely have a lasting effect on the labor market's makeup. Reads more https://www.businessinsider.com/july-jobs-report-528000-payrolls-unemployment-rate-hiring-trends-recovery-2022-8

OUCH!!

Tiger Global's flagship fund has ended Q2 with a 50% loss after fees on the back of the recent crash in tech stock prices, according to a report by The Financial Times.

The report cites a recent letter sent to investors as revealing that a long-only fund managed by the firm fared even worse with a loss of 63.6% over the same period.

https://www.hedgeweek.com/2022/08/04/316569/tiger-globals-flagship-fund-down-50

*****

From Krugman:

Finally, despite all the ways the J.C.T. analysis tilts the playing field against the Inflation Reduction Act, the claimed increase in middle-class taxes is tiny. For example, according to the J.C.T., the federal tax rate on families earning between $50,000 and $75,000 a year would rise from 13.0 percent to ... 13.1 percent. Read more

https://www.nytimes.com/2022/08/04/opinion/climate-change-bill-taxes.html

*****

Door Dash reports larger loss than expected but record food-delivery orders; stock surges??? The more they sell the more They lose.

*****

More perspective

https://www.google.com/search?client=firefox-b-1-d&q=hubble+pic+of+sumbrero+galaxy

from Ed Monahan

The Sombrero Galaxy by Hubble

There are approx. 200 to 400 billion stars in the Milky Way. Now look at this galaxy. It has 200 to 300 billion stars. Now…. there are billions of galaxies! With billions of stars and that is just what we can observe with the current technology. A billion billion is a Quintillion and there is about 400 billion x a quintillion stars in the known universe. Something to the power of 10 to the 24th. It blows my mind .....What gets me isn't just the number of stars, and the enormous scale and size and distance. It's the amount of time. That each galaxy is 31 million light years away. The amount of time it took for the light from that picture to reach us, entire species could evolve on planets and develop into a space faring galactic civilization; empires could rise and fall, then fade into dust, and be lost in the sands of time, without us ever knowing. And that's just the 31 million years it took for that light, which is a drop in the bucket of time that this galaxy has had to create life over many many billions of years.

*****

 


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309 W Johnson Street Apt 544 Madison, WI 53703 312-925-5248
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