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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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25 February 2023

Stock markets trended lower this week whiles bond yields gained as this week's inflation statistics were not as encouraging (higher than expected).

We eliminated our retail positions ahead of earnings as those retailers who did report this week ended lower. We also sold Hain scratch and incurred more unfortunate results trying to trade Google and Amazon. Hopefully we are cured. We did repurchase IBM down 12% from last month's high and yielding over 5% priced at 12 times earnings.

We currently own significant size in the 0-3 month Treasury ETFs -SPDR Bloomberg 1-3 Month T-Bill ETF (BIL) and iShares 0-3 Month Treasury Bond ETF (SGOV)- whose yields are approaching 4.5% annualized. We expect their yields on an annualized basis to exceed 5% within a few months as the FED continues to raise interest rates.

Our current holdings all yield over 4.5%. They Are the Treasury ETFs (BIL & SGOV) 4.5%, IBM 5.1%, Verizon 6.5%, AT&T 5.6%, Ford 5% and Key Banks 4.6%.

Many accounts are 75% and greater the 3-month Treasury ETFs.

And so, it goes.



A fool and his money are soon parted.

Despite the implosion of FTX and projections of a cryptocurrency winter, the metaverse real estate market is expected to grow by $5.37 billion by 2026.


‘Law and Order ‘DeSantis Florida vs Liberal ‘Woke' New York And NY City Stats.

Regardless, any comparison between Florida and New York does not serve DeSantis well. In 2020, the homicide rate in Florida was 5.9 murders per 100,000 people, and the violent crime rate was 384 per 100,000, according to the Daily Beast, citing the FBI's Uniform Crime Report. New York, meanwhile, had 4.2 homicides per 100,000 people and a violent crime rate of 364 per 100,000 people. New York City itself had a homicide rate of 5.6 per 100,000, slightly below the national average of 6.5 and half Miami's rate of 12.8.

Eric Adams, New York's law-and-order mayor, blasted DeSantis. "Welcome to NYC, @GovRonDeSantis, a place where we don't ban books, discriminate against our LGBTQ+ neighbors, use asylum seekers as props, or let the government stand between a woman and health care,"


Presidents Day Weekend 2023

Markets were lower this week. They are approaching a period when markets usually retrench into mid-March before rallying into May. We traded Google this week, first selling our oversized position for a too large loss and then repurchasing in more reasonable amounts. It was not our finest trade this year. We also sold Ford when it announced stopping production of the Ford 150 because of battery problems. We then repurchased lesser amounts in several accounts after the shares failed to react lower.

We ended the week with positions in Amazon, Google, Walgreen's Boots, Verizon, AT&T, VFC Retail, Key Bank, Hain Celestial, The Gap, Ford and Under Armour. Most accounts (except the smallest) have 70% and greater holdings in the two 0-3 month Treasury ETFs (BIL and SGOV0) which currently yield over 4.4% and will be at 5% within a few months. We plan on holding them thru the year since we are up nicely for the year in all accounts and another 4% gain will place accounts up over 10% and more for the year which we will consider a very satisfactory result.

Spring is coming. Soon, Hooray.


AI and Chatbots are great at mansplaining.

And that's how they got us. Chatbots are bullshit engines built to say things with incontrovertible certainty and a complete lack of expertise. No wonder the tech elite jokingly call them "mansplaining as a service." And now they're going to be driving the primary way humans acquire knowledge day to day.


10 February 2023

Stock markets and bond prices were lower this week as the 500,0000 plus jobs gained in January which was reported on last Friday continued to spook the bulls who were hoping that Fed tightening would soon pass.

For some reason folks think getting jobs is bad for stocks. Supposedly the Fed wants a 5% or greater unemployment rate. We are guessing that many of the job additions (Leisure and hospitality added 128,000 jobs professional and business services (82,000), government (74,000) and health care (58,000)) were of the less than $20 per hour type. Those aren't going to break the employer's bank accounts. But worry is the norm for traders and everyone else's job but theirs is easily surrendered.

We are down to 4 stocks and 75% Treasury ETFs (less than 1 year maturity) yielding over 4.2% annually in most accounts.

We have a now oversize position in Alphabet (Google) after it dropped 15% this week on fears that Microsoft is going to decimate GOOG's search/ad business since MSFT is adding Chatbot AI to its Bing search engine. Bing is and has always been a joke and we are in a show me frame of mind regarding MSFT Bing/Chatbot destroying GOOG's business. Goog is priced at 18 times earnings with earnings growing at 18% a year and a yearly cash flow of $75 billion with $125 billion cash on hand.

Our other stocks are VF Corp (Timberland, Vans, North Face) on a 15 year low, yielding 4.5% and priced at 12 times. The shares dropped 10% when they reported this week (better than) but cut their dividend to the present level. We are back in The Gap (can't resist retail) after selling 10% higher last week and also Ford which we traded profitably earlier this week and sold 8% higher than we just repurchased. Both yield over 4.5 %


The smart people aren't always so smart:

The spectacular implosion of FTX has led to big investment losses for the football star Tom Brady, the New England Patriots owner Robert Kraft, and the fashion model Gisele Bündchen.

As part of its bankruptcy process, FTX Monday released a list of its top equity holders, detailing just how many investors were set to be wiped out from the downfall of the crypto exchange.

The document showed Brady, who was a brand ambassador for FTX and appeared in a commercial for the company, owned just over 1.1 million common shares of FTX. Meanwhile,

Other investors on FTX's equity-holder list were elite Wall Street hedge funds and growth investors, according to the bankruptcy document.

Well-known funds run by Tiger Global, Thoma Bravo, Sequoia Capital, SkyBridge, and Third Point, among others, were listed as owning millions of both common and preferred shares of FTX.

Those investments are now virtually worthless, representing a steep fall from FTX's peak valuation of about $32 billion. During typical bankruptcy proceedings, only bond holders are able to recoup some of their losses, while equity investors are usually wiped out.

Read more: https://markets.businessinsider.com/news/currencies/ftx-bankruptcy-equity-investors-wiped-out-tom-brady-robert-kraft-2023-1?utm_medium=ingest&utm_source=markets


3 February 2023

The DJIA was unchanged for the week as some large cap components like United Health, Caterpillar and Boeing suffered from profit taking. The S&P 500 gained 1% and the NASDAQ was up 3%. Those results included the Wednesday reversal and move higher of over 3% in the NASDAQ encouraged by Fed Chairman Powell's seemingly dovish comments. Meta was the star of the week leading the NASDAQ 100 higher because, although revenues and earnings were less than, CEO Zuckerberg spoke of efficiency and reduced capital spending on the earnings call to the delight of the analyst and the bull trader community- the bears not so much. ... On Thursday night Google and Amazon disappointed and while Apple results were less than Apple shares still rallied on Friday but GOOG and AMZN dropped.

The debt ceiling continues to occupy the talking heads when other news lags. Interestingly the Repubs/Trump tax cuts for the wealthy and corporations in 2017 increased about $7.8 trillion of the $31.4 trillion debt that now must be paid and, The Repubs Congress raised the debt ceiling three times during Trump.

The tug of bull bear forces remains prominent in the markets and we have moved to the sidelines with accounts up 10% to 15% for the year. Coupled with the significant out performance last year caution seems the best strategy.

We currently hold 3 different Treasury 0- 1 year maturity ETFS yielding 4% and stocks Google, Ford (out and back in after less than earnings- Ford to pay 65 cent extra dividend in February) Key Bank (same) and an oversize position in AT&T.

We sold Verizon flat to concentrate on AT&T because VZ is in the DJIA and may suffer more in any downturn plus the fact that AT&T had a much greater postpaid phone add (700,000) than VZ (40,000) in the latest Quarter.

We sold IBM for plus scratch after it failed to rally from its selloff and we eliminated other stocks for plus scratches to increase our cash/Treasury ETF positions to 50% -70%. For the first time in years, we don't own retail. We think they have jumped on short covering and want to await earnings reports later this month.

We did purchase-in small amounts- C3-AI- a speculative AI company run by Tom Seibel- a self-made tech billionaire-who merged his company of the same name with Oracle in 2006 and started C3-AI in 2009. AI is the new investment buzzword and this company's name is worth $10 to the meme folks. On Dec 8, 2020 C3-AI priced at $42, selling 15.5 million shares and raising $651 million in new funding. Shares of C3 AI soared more than 140% (to over $100) in the company's initial minutes trading, implying a market cap, at least temporarily, approaching $10 billion. Now trading in the mid $20s we are holding as a pure spec on the AI animal spirits in the current market environment. It is the ultimate anchovy.



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