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Lemley Yarling Management Co
309 W Johnson Street
Apt 544
Madison, WI 53703
Bud: 312-925-5248       Kathy: 630-323-8422

January 25, 2013

Model Portfolio Value As of 25 January 2013

$ 684,329

Comment on Model Portfolio activity

We repurchased GM B warrants. We also repurchased Apple. With $130 a share in cash and equivalents the shares are priced at 6X earnings net of the cash. The analysts loved it at $700 and hate in at $450. Go figure.

The Labor Department said Thursday that weekly unemployment benefit applications dropped 5,000 to a seasonally adjusted 330,000. That's the fewest since January 2008.

The four-week average, a less volatile measure, fell to 351,750. That's also the lowest in nearly five years.

Henry Blodget from: http://www.businessinsider.com/the-walton-family-has-as-much-money-as-the-bottom-third-of-the-us-2013-1

An extraordinary statistic tweeted by Idealab CEO Bill Gross from a Davos session he is attending:

"The 6 members of the Walmart family have as much combined wealth as the entire bottom 1/3 of the United States."

I assume Bill is referring to the "Walton" family. Regardless, what it means is that Walmart is basically a gigantic vacuum cleaner that sucks money from poorer and lower-middle-class Americans and sprays it into the bank accounts of the Waltons.

Too bad Walmart doesn't pay its poor and lower-middle-class workers enough to lift them out of near-poverty.

(The average Walmart associate wage is about $12 an hour. That's about $25,000 a year--close to the poverty line.)

(And, no, I'm not a "Marxist." But I do think that one of the ways to fix our crappy economy is to persuade companies to pay people more. Walmart's associates are dedicating their lives to the company. And Walmart a mind-bogglingly successful and excellent company, barely pays them enough to lift them out of poverty.)

Read more:

We were thinking about the similarity of the market action from 1968 to 1973 and the markets from 2007 to 2013 while on our walk this morning. We then read Jeff Cooperís column on Minyanville:

Canít help wonder with AAPLís stock crashing, if suddenly those standing-room only Apple temples will have believers -- many of whom are owners of Apple stock -- pondering if theyíre the ones being sacrificed at the altar.

Some months ago, I suggested that more money could be lost in Apple on the way down than was ever made on the way up, the reason being that love affairs usually leaves one coming back for more. If you liked Apple at 650, you love it at 550.

At 450, you discover the object of your affection Ďin flagrante delictoí.

Itís not about the earnings. There is zero correlation between a stock's performance and its earnings in any one-year period. Over the long haul, yes, but not in any given year.

Itís about being over-owned and under-owned -- that quaint concept of supply and demand. That old familiar free market concept is what drives stock price: more buyers than sellers, more sellers than buyers.

A stock is either under accumulation or under distribution, or going sideways, having reached equilibrium.

This is the backbone of the perversity of Mr. Market, whose job at the end of the day is to hurt the most people. Mr. Marketís just doing his job, just like the Bear must ultimately do his job: the vast majority cannot side-step a bear market because itís the job of the Bear to wring out the excesses and clean the slate.

At the bottom in 2009, the values present by several measures such as book value were not what they were at the bottoms in 1974 or 1982.

I think the likelihood is that this is going to happen. That means the odds are that there is a 3rd leg down in this apparent diamond pattern that began in 2000 -- a pattern that echoes what we saw in the 1970ís.

We should be near the false breakout top that occurred in January 1973 analogue, which was roughly 6 years from the Go-Go Top that occurred in 1966.

We are in the 6th year from the 2007 top.

One of the big bricks in the current wall of worry may be that the markets were able to shrug off its badge, Apple, and advance despite the rust and the red in the icon.

Read more:


January 18, 2013

Model Portfolio Value As of 18 January 2013

$ 684,451

January 11, 2013

Model Portfolio Value As of 11 January 2013

$ 684,451

January 4, 2013

Model Portfolio Value As of 4 January 2013

$ 688,051

Comment on Model Portfolio activity

The Model Portfolio was up 31% in 2012 and most accounts were up 20% to 35% last year. The S&P 500 was up 16% so we are of course satisfied with our clientís performance. Thanks to all our clients for the confidence they place in us.

Well the tax cliff has passed but there is still the debt ceiling cliff, the spending cut cliff, and the Heathcliff to worry about. So much time and so much worry.

We added to our GM B warrants and also repurchased Ford after some TV gurus began mentioning autos as a good place for funds in 2013. We have been in and out of both for the past four years and hopefully this will be their year.

We will be traveling for the next few weeks visiting clients and so the portfolio will be posted but there will be no comments till the end of the month.






















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