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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 31, 2014

Model Portfolio Value As of 31 January 2014

$ 729,650

Comment on Model Portfolio activity

Markets have been under pressure this week and we have recommitted funds in issues that we sold higher- Symantec, CTXS, Athena (Justice, Lane Bryant), and added two new issues in Proctor&Gamble and International Game technology. We also added GM B warrants.

With a nice cash position we are willing to cautiously commit to issues we feel offer appreciation potential. Further correction is needed to create a base for a sustained move higher.



January 24, 2014

Model Portfolio Value As of 24 January 2014

$ 731,899

Comment on Model Portfolio activity

Stocks are in a correction mode as last yearís winners lock in profits and this yearís money waits on the sidelines.† We sold a few more issues for profits and one loss (Sony) and repurchased American Eagle $2.50 lower than we sold it a week ago as the CEO suddenly quit. Old management took over on an interim basis. Insiders own 17% of the shares so we are willing to give old management the nod since they are much more involved in AEOís success than we.

We repurchased Alcoa higher than we sold last week when a JP Morgan analyst raised estimates and issued a buy on the stock.† We have been trading Alcoa with flat success for the past few years as it trended lower. The oversupply of aluminum has been a bugaboo to earnings. The current wisdom suggests that the supply condition may be tightening. AA has room to run on the upside. Our recent sale last week was too cute but we donít want ego to prevent the longer term potential to be squandered.

Alcoa (AA_) jumped early in Tuesday's session after receiving an upgrade from JPMorgan. The investment firm upgraded the stock to "overweight" from "neutral" and raised its price target to $15 to reflect tightening aluminum markets and rising regional aluminum premiums on earnings.

"Given the pace and amount at which premiums have recently increased, it is clearly difficult to forecast for how long they will remain near current levels which we believe provide a significant amount of earnings support to the company's primary aluminum smelting operations," wrote JPMorgan analyst Michael F. Gambardella in the report.

The firm increased its 2014 earnings estimates to 78 cents a share from 40 cents a share and fiscal 2015 earnings to 68 cents a share from 55 cents a share. Analysts surveyed by Thomson Reuters anticipate net income of 32 cents a share in fiscal 2014 and 58 cents a share in fiscal 2015.

The world's third-largest aluminum producer enjoyed a strong surge in share prices last week, after announcing it would close two potlines at its Massena East plant in New York state on the grounds they were not competitive anymore. The company also said it plans to expand its Davenport, Iowa factory, a plant dedicated to supplying aluminum to car and truck producers.

On Friday, the Pittsburgh-based business announced its board had approved a quarterly dividend of 3 cents a share payable Feb. 25 to common stock shareholders of record at the close of Feb. 7. On its cumulative preferred stock priced at $3.75 a share, the company will offer a quarterly dividend of 93.75 cents a share on April 1 to shareholders of record at the close of March 14.





January 17, 2014

Model Portfolio Value As of 17 January 2014

$ 740,076

Comment on Model Portfolio activity

We raised more cash this week taking profits as earnings season continues. Bad news or even neutral news was greeted with more negative action than above expectations news was followed by positive action.

With the S&P 500 up 50% in the last two years without any serious correction we would be pushing our luck and our experience to remain as fully invested as we were at year end in our successful attempt to participate in the yearend rally.

The world is not going to end but with so many bulls caution seems warranted.



January 10, 2014

Model Portfolio Value As of 10 January 2014

$ 743,709

Comment on Model Portfolio activity

We raised cash in the New Year from some issues that gave us the year end pop. We also sold Abercrombie for a profit when it jumped 12% on news of better that expected lower earnings. And we decided to eliminate J C Penney. We donít want the soap opera to affect this yearís returns.



January 3, 2014

Model Portfolio Value As of 3 January 2014

$ 738,443

Happy New Year. Our first post in the New Year will be on Friday January 10 as we are taking a week to visit clients.


























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309 W Johnson Street Apt 544, Madison, Wi 53703 312-925-5248
The factual statements herein have been taken from sources we believe to be reliable but such statements are made without any representation as to accuracy or completeness or otherwise. From time to time the Lemley Letter, or one or more of its officers or employees, may buy and sell as agent the securities referred to herein or options relating thereto, and may have a long or short position in such securities or options. This report should not be construed as a solicitation or offer of the purchase or sale of securities. Prices shown are approximate. Past performance is no indication of future performance.