Lemley Yarling Management Co
309 W Johnson St
Madison, WI 53703
Comments on activity in client accounts
23 April 2021
We are heading to the land of milk and honey for our monthly sojourn with nature so the next post will be May 7.
Markets meandered and Bitcoin crashed this week as the treatment of capital gains as income for folks earning over $1 million a year in adjusted gross took the airways by storm on Thursday. Even though Biden proposed this last fall when running for President the talking heads decided they needed a new scare idea to drive viewership.
We've always thought that earnings from trading stocks or other assets whether over a day or five years should be taxed at regular rates. Folks get up in the morning, drive thru traffic to work, stand or load or serve or call all day long with no rest, drive or take public transit home and pay ordinary rates on their income. Folks who sit home listening to music and making a trade now and if they earn, they pay a much reduced tax rate. That doesn't make sense.
Anyway, this discourse will fade and the sell in May and go away axiom will soon be the talking point.
We have readjusted portfolios again and hopefully we will be content with our diversification and ownership.
During the week we reduced our ownership in Macy's by buying and selling shares for scratch gain, reduced Bed Bath, Sold GE, took a loss in Ark Financial, reduced Canadian Solar, bought AT&T on good earnings numbers, bought Huntington Banks with a 4% yield, and repurchased Intel and Verizon.
We currently own Western Digital, Gilead, Intel, Verizon, Canadian Solar, Viacom, AT&T, Jets (airline ETF), Bed Bath, Apache oil, Macy's, Huntington Banks, and Ford.
The repose of the nation cannot be secure without arms, armies cannot be maintained without pay, nor can the pay be produced without taxes.
The same goes for roads, bridges, internet, child care, medical care, air travel, and climate. Taxes provide for societal not individual needs.
16 April 2021
Markets continue to grind higher and we continue to adjust portfolios to participate while maintaining sufficient cash.
Bed Bath dropped a day ahead of earnings and we re-established a position because we have been profitably trading the shares this year. Earnings were good but not good enough and the shares wound up dropping 20% on the week. With the drop we were able to establish a nice position in the shares and expect to do well over the near term. We switched Verizon at a plus scratch if the dividend is included to AT&T which reports earnings next week. We expect a positive report. We switched XLK at a scratch profit to ARKK and ARKF as we continue to profitably (so far) speculate in these very volatile issues. We sold Merck (plus scratch), Wells Fargo (third trading profit of the year and First Solar (scratch).
We finish the week 60% cash and positions in IBM, ARK, Jets (airline ETF), AT&T, Canadian Solar, Viacom, Bed Bath, Macy's, GE, Ford.
Nothing is so hard for those who abound in riches as to conceive how others can be in want.
9 April 2021
As is obvious from our rapid and unprofitable trading of the past few weeks we are conflicted as to the direction of the markets and the risk involved in holding positions.
There are so many warning signs- Bitcoin; NFTs (selling computer images); baseball cards selling for $3 million, Shopify cheap at 300 times earnings since it’s priced at $1233 down from $1500; and on and on.
On the other hand, AT&T yields 6%; Verizon 4%, and Merck 3.5% and are priced at 12 times earnings. The problem with holding value stocks in overpriced markets is that last March value stocks dropped as much as the goofy priced stocks and we continue to foresee a reckoning at some time this year.
And so, we hope to get better control of our greed and thus our trading. We end the week owning XLK (the tech ETF which is 20% Apple and 20% Microsoft), IBM, Box, AT&T, Verizon, First Solar, Canadian Solar, Viacom, Merck, XLE (domestic oil ETF), Apache Oil, Macy’s, GE and Ford.
Happy April showers.
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