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

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27 August 2021

Markets were mildly positive this week and closed higher on Friday as Fed Chairman Powell suggested that the Fed would begin tapering its bond purchases later this year. That was important news -we guess- for the big boys and girls who need miniscule reasons trade Treasuries on a daily basis.

We managed to profitably trade retail stocks earnings' reports this week and ended with positions in The Gap, Nordstrom and Urban Outfitters having realized scratch and better profits in Abercrombie, American Eagle and Macy's.

We aren't staying long in our trades since we are intent on having a healthy cash position by September. With accounts up 5% to 10% we are content to wait till tax loss selling in late October thru early December to become more committed.

Covid cases are expanding but there won't be any shutdowns and the fight over masking and shots will continue since Americans love to disagree on all things.

Below we share two earnings reports. The first is for Nordstrom which beat expectations by a mile and dropped 30% because – because.

Nordstrom- market cap $5 billion, revenues $12 billion,earnings $300 million, employess 74,000.

Shares of Nordstrom (NYSE: JWN) plunged 17.6% on Wednesday, following the release of the retailer's second-quarter financial report. Revenue from Nordstrom's namesake brand surged 127%, while sales for its Nordstrom Rack brand increased 61%. "We capitalized on improving customer demand with focused execution, healthy inventory sell-through, and continued expense management to deliver strong quarterly results," CEO Erik Nordstrom said in a press release

Snowflake- what a confusing name- snowflakes disappear- reported better than sales and of course a loss but it rallied. Snowflake may have a great product but, as in 2000 with Microsoft (14 years to regain its 2000 price), Qualcomm (18 years to regain) and many other companies, earnings versus price rather than wondrous musings about products eventually matter.

Snowflake market cap $80 billions, revenues $1 billion, earnings -$100 million, employees 3000.

Shares are gaining ground in late trading after the company posted better-than-expected growth (but posted a loss as it has since beginning) for its fiscal second quarter ended July 31. Management raised its full-year forecast for product sales for a second time.

For the quarter, the cloud-based data warehouse software company reported revenue of $272.2 million, up 104% from a year ago, and ahead of the Street consensus at $256.5 million. Product revenue was $254.6 million, up 103%, and ahead of the company's guidance range of $235 million to $240 million.

Snowflake posted an operating loss for the quarter of $21.9 million on a non-GAAP basis, resulting in a non-GAAP operating margin of -8%, better than the company's projection of -19%. Adjusted free cash flow was $2.8 million, the third quarter in a row that measure has been in the black. On a GAAP basis, the company lost 64 cents a share in the quarter.


Every time we reach a turning point in war or police actions or incursions or drone attacks, we think of the poem below that we first read during the Viet Nam war. It seems appropriate today given the terrible loss of life suffered in Afghanistan so near the exit from that too long war; and the suffering and death that will occur after the U.S. leaves.



It is always the same way,
that after the armies have
settled into their homes and
the borders are shifted their
one lame mile
that talking rises that they
have found the little girl.

It is so, they have found her in a
tongue-tied corner of the woods,
and they have learned from
the palsied woman who lives with
her son by the bridge how in a
tantrum of strength she rose
to the window and saw
when the soldiers came they
killed the Mayor's little girl.

And so it starts, how the child
was gathering sunshine in her
rainbow creased dress when she
or how,
in another town, by another bridge
the girl was sleeping in the grass
when they came and that her
smile stuck to her lips while the sky
clanged and beat around her.

And now all the schoolchildren, so
scrubbed and solemn in rows are
standing as the Mayor, with
his one good arm,
drapes a few flowers on the brick and
wooded monument that stands next to
the bridge and a

Hundred years from the window of the
old woman who first saw the
glinting helmets and heard the
halfhearted scream roll
into the grass.


20 August 2021

At our loss, we ignored the adage of never let a trade turn into an investment. Last week we doubled down on Canadian Solar and Western Digital and suffered as a result. On Friday we reduced both positions by half taking a too large loss; and reinvested in retail stocks which have been much kinder to us this year.

At weekend we owned more manageable positions in Canadian Solar and Western Digital and other holdings in GM, The Gap, Bed Bath, Cleveland Cliffs and Ford. We reentered Macy's higher after they posted blowout earnings and sales for the quarter, raised thir annual forecast and reinstituted their dividend. We expect a large pullback and so we are maintaining a 50% and more cash position.


Memories of

August at the farm

And so, it begins.
Andy Kathy Rob and Lisa
And Michael Amy and Michael
Come to the farm and Water World
Then the Powwow and a Cubs game and then
Tyler's birthday Dave and Lisa' anniversary Viterbo Reunion,
Neighbor pot luck birthday party riding Skeeter Abigail walking
Luna and Cubby and Pooper and playing house with Bernadette and Norah
Silly Seamus and Talkative Tyler riding bikes Dave and Tyler
Cleaning the spring Kelle speaking French and riding
Her bike 100 miles with Katie while Bud and Jackie sit on the porch
Then Rich and Jay and Katie and Ally and Richie and Patrick and
Number 5 plus maybe Barb and Big Rich and we all
Go to the Crawford County Fair to see the cows and sheep
And pigs and goats and corn and eat the blueberry pie and
Then pick blackberries and get mosquito bites and all wet in the creek
And then grandpa and grandma get to rest.

All these thoughts filled our mind
As we walked to the office this morning
Smelling the new mown hay.


Friday the 13th August 2021

One thought and one question before our weekly market musings.

In the crazy political world that currently exists, now that Cuomo has resigned as governor for sexual harassment is he qualified to run for president against Trump since they both have over 15 claims against them?

And, if there are 10 million jobs available, how can there be a problem with immigrants taking jobs?


This week we were gob smacked by Micron. It was a trade and we took our too large loss and moved on. Western Digital is a trade/investment that we have been in and out of for the past three years. We added a bit more with Micron money.

We eliminated our retail exposure for a net positive and will revisit most of those stocks-hopefully at lower levels before year end. We continued to raise cash, as we said we would, in preparation for a September/October pull back. We took modest trading profits in BankAmerica, GM, XLE, Newell, Sprouts and XLE. We eliminated Walgreens for a loss.

Large accounts are all now over 70% cash with smaller accounts more than 50% cash. We own AT&T (7% yld), Cleveland Cliffs (infrastructure), Verizon (4% yld) and Western Digital.


"No doubt about it, summer was on the wane. The mornings seemed a shade cooler. The nights were hungry, and ate more daylight."

― Robert McCammon, Boy's Life


6 August 2021

Back to work this week we did some trading in earnings misses. Markets continued their gradual move higher as earnings' nirvana encouraged additional purchases. With the 10-year Treasury dropping to a yield of 1.1% there was some caution midweek as gurus tried to figure out how inflation fears in stocks and the interest rate drop in Treasuries on slowdown fear could exist at the same time. One theory was that there we so many big boys and girls short (thinking rates would rise) the 10-year Treasury that just a little push lower in rates (higher in price) forced highly leveraged folks to cover their shorts leading to the rally in Treasuries. A good new employment number of over 900,000 for the month of July led to a pullback in Treasury prices and a rise in yield at week end.

We have continued to adjust holdings while keeping a comfortable cash position. Accounts are up 6% to 10% for the year.

Our current holdings are Western Digital, Verizon, Intel, Walgreens Boots, BankAmerica, Newell, Cleveland Cliffs, Sprouts Foods, Ford, Bed Bath, Macy's and The Container Store.


"I have not failed. I've just found 10,000 ways that won't work."

― Thomas A. Edison



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