Lemley Yarling Management Co
309 W Johnson St
Madison, WI 53703
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16 July Post
We are leaving for the land of milk and honey for 2 weeks with our kids and grandkids so the next post will be August 6.
Markets meandered higher this week while our stocks meandered lower. Monthly inflation numbers are rising and so some gurus are suggesting runaway inflation. Fed Chairman Powell disagrees and say high inflation is only temporary. The Ten-year Treasury agrees with him as is traded under 1.3% this week.
The talking heads say that if inflation is here to stay the high flyers should be avoided and money should go to industrial and value stocks. Other talking heads and the bond mavens are saying that inflation is not a worry and so money should be going to the high-flying tech wonders that don't have to worry about an economic slowdown.
As always, Mr. Market will sort it out. We did some adjusting this week selling stocks we wouldn't buy lower and adding a bit to stocks we would.
We currently own Western Digital for a trade as we have been trading it all year.
We own Intel for the longer term as we do Walgreen Boots. Both are priced at 10X earnings and out of favor.
Canadian Solar is a trade.
And we've been trading/owning Hewlett Packard profitably at 8 times earnings and a 3.5% yield.
Apache Oil with a huge find off Surinam is our oil play that we trade and rebuy as the spirit moves us.
We have been in and out of Cleveland Cliffs. If the infrastructure bill passes it should move substantially higher. It is trading at 4X next year's earnings
The Gap, Bed Bath, Container Store and Macy's are all going to have good numbers over the next year. They remain volatile and the computer/option boys and girls play with them on both the short and long side causing disconcerting volatility. We have been trading them on the way up and will continue to do so.
Ford and GE are long term. The 1 for 8 reverse split in GE takes place at month end. Usually, reverse splits are negative for the stock price so it will be interesting to see how GE fares. We want to own it so we are assuming the risk. Both Ford and GE have been profitable trades for us this year and we think now is the time to hold them.
We own Rite Aid as a cheap stock that may offer a profitable trade if rumors of an Amazon takeover resurface. If not, the meme folks may move it because it has a very large short position relative to the float. The memers have already moved it twice this year. And at its current price its worth holding.
Nokia seems to have set itself on the right course and so we are dabbling in the 5G equipment maker.
Don't gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don't go up, don't buy it.
9 July 2021
Markets were weak all week as the 10-year Treasury yield dropped under 1.30%. Traders were flummoxed by this action as the fear of inflation had many market mavens positing higher not lower rates.
Our surmise is that some folks were using the vacation and summer doldrums to play games. Whatever, we traded the selloff and then profitably sold some anchovies into Friday's rally moving the proceeds to more staid issues such as AT&T and Organon.
We currently own: Intel, Walgreens, Huntington Bank, Apache, AT&T, Organon, Bed Bath, Macy's, Container Store, Ford Ge, Rite Aid and our meme stock Orphazyme- which hasn't been meme-ing for us. Cash positions are lower than usual.
Opinion is really the lowest form of human knowledge. ... The highest form of knowledge is empathy, for it requires us to suspend our egos and live in another's world. It requires profound purpose larger than the self-kind of understanding.
Plato, The Republic
2 July 2021
Dull week. We did a little trading and are trying to focus on getting to mostly cash by the end of August. Our greed is intervening as we continue to trade Bed Bath, Micron, Western Digital, Cleveland Cliffs and a few new anchovies Orphazyme (a meme stock) and Rite Aid.
We currently own Micron, Western Digital, Verizon, Intel, Walgreens Boots, Huntington Bank, Hewlett Packard "Enterprises, Apache Oil, Bed Bath, Macy's, Ford, GE, Rite Aid and Orphazyme.
A rare collection of Kweichow Moutai liquor has broken Sotheby's record for Moutai auctions at $1.4 million. It was estimated to be worth between $276,000 and $552,000. Kweichow Moutai is known for its pungent notes and high alcohol content and is sometimes stockpiled as an investment.
This particular batch that was auctioned was produced during China's chaotic Cultural Revolution period from 1966 to 1976. The 1974 bottle features a sunflower logo instead of the usual flying fairy. According to Sotheby's, the logo was changed in that period because a flying fairy was "deemed inappropriate."
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