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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

July 27, 2012

Model Portfolio Value As of 27 July 2012

$ 610,074

Comment on Model Portfolio activity

We sold JC Penney for a plus scratch; traded Deutsch Bank for a plus scratch  when we changed our mind on the purchase; and added some Netflix to larger accounts when it dropped 20% in a day to a two year low on earnings news. We also added Cisco ahead of earnings when it dropped down to $15. Juniper and Symantec reported good earnings and rallied during the week. Ford forecast a $1 billion loss in Europe this year but U.S. sales will allow the company to remain very profitable. Both Ford and GM are cheap, as are the other issues we own.

July 20, 2012

Model Portfolio Value As of 20 July 2012

$ 598,423

Comment on Model Portfolio activity

We switched Hewlett Packard and Dell to GE and Yahoo respectively.  We also repurchased Abercrombie is some larger accounts after it refused to give back any of its pop of a week ago. We added shares of Morgan Stanley when it dropped on disappointing earnings. We took a bad loss (percentage wise but not dollar wise) on Alcatel Lucent and will not revisit that stock in the future. We added shares of Ford and also shares of the SPDR Financial (XLF) to get more financial exposure. Finally we repurchased BankAmerica after they reported decent earnings and revenues but the shares backed off. We are now almost 60% invested in the Model Portfolio.



July 13, 2012

Model Portfolio Value As of 13 July 2012

$ 594,496

Comment on Model Portfolio activity

We took a trading profit in Abercrombie when the shares popped on buyback rumors. We aren’t a fan of buybacks although ANF would be doing it at the stock’s recent low rather than a high as is usually the case with buybacks. We also added a few shares of JP Morgan ahead of the earning’s announcement today at under $34 per share.

The S&P 500 seems range bound (1300-1400) and we aren’t expecting much for the summer. We have been surprised often when making a boring prediction but that is our best thought for now.


July 6, 2012

Model Portfolio Value As of 6 July 2012

$ 601,311

Comment on Model Portfolio activity

We bought Alcatel at $1.65 (sold at $1.90 in February), Hewlett Packard at $19.95 (sold at $29 in February), Ford at $9.59 (sold at $12.40 in February) and JC Penney at $21 down from $45 in February.

On Thursday ADP announced 186,000 private sector employment gain versus 100,000 expected. On Friday the Labor Department announced an Employment gain of 80,000 with a gain of 84,000 private sector jobs and a loss of 4,000 government jobs.

During the week Barclay’s announced a settlement with the authorities by paying a $450 million fine for interest rate rigging. The CEO resigned but will get a $35 million golden parachute. GlaxoSmithKline agreed to pay $3 billion for false advertising and doctor payoffs. In both cases no one goes to jail.



Big fines won't work unless they're accompanied by prosecutions


Related news?

                NEWARK -- A 27-year veteran of the United States Postal Service was arrested Monday for pilfering $500 in gift cards and several DVDs from the mail he was tasked with storing at the city’s main post office, authorities said.

The alleged thief was also seen rifling through the mail of State Sen. Ronald Rice several times last month.

Kevin Jones, 56, of Newark, is the fifth postal service employee arrested on theft charges since the Essex County Prosecutor’s Office and the U.S. Postal Service opened a joint investigation into employee theft at county post offices last summer, said Pete Sepulveda, Assistant Prosecutor for Professional Standards.

“Each case in itself is unremarkable, but to see how well the operation and the cooperation has worked between a federal agency and the prosecutor’s office, to have five arrests on this is quite successful,” he said.

Another story:

Three years ago, Gina Ray, who is now 31 and unemployed, was fined $179 for speeding. She failed to show up at court (she says the ticket bore the wrong date), so her license was revoked. When she was next pulled over, she was, of course, driving without a license. By then her fees added up to more than $1,500. Unable to pay, she was handed over to a private probation company and jailed — charged an additional fee for each day behind bars.

For that driving offense, Ms. Ray has been locked up three times for a total of 40 days and owes $3,170, much of it to the probation company. Her story, in hardscrabble, rural Alabama, where Krispy Kreme promises that “two can dine for $5.99,” is not about innocence.

It is, rather, about the mushrooming of fines and fees levied by money-starved towns across the country and the for-profit businesses that administer the system. The result is that growing numbers of poor people, like Ms. Ray, are ending up jailed and in debt for minor infractions.

Full story: http://www.nytimes.com/2012/07/03/us/probation-fees-multiply-as-companies-profit.html?_r=2&pagewanted=1&ref=todayspaper
























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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.