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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

May 25, 2012

Model Portfolio Value As of 25 May 2012

$ 606,375

Comment on Model Portfolio activity

We thought a buying opportunity might arise on Tuesday if the markets dropped substantially on Monday and then dropped Tuesday till noon. Instead, the markets did the opposite by rallying big-time on Monday and dropping on Tuesday after rallying till noon. On Wednesday the market measures dropped over 1% but rallied to close unchanged. They then meandered on Thursday and Friday.

1250 and 1150 remain our targets on the S&P 500. Our thought is that a swift drop to 1250 would provide a good trading opportunity while our investment level is the 1150. For now we remain in cash and patient.


May 18, 2012

Model Portfolio Value As of 18 May 2012

$ 606,286

Comment on Model Portfolio activity

We remain all cash in accounts. The S&P 500 is about 7% off its high but we expect it to visit 1250 (at 1300 today) and maybe 1115 before the correction is over. Since the markets have been down 12 of the last 13 days a rally next Tuesday is a probability, but with the Facebook offering complete at the high end of the range we expect any rally to fail. Cash earns nothing but it also doesn’t lose anything.


May 11, 2012

Model Portfolio Value As of 11 May 2012

$ 606,384

Comment on Model Portfolio activity

We remain all cash in accounts. The markets have pulled back a bit but we envision a greater drop and are biding our time.


May 4, 2012

Model Portfolio Value As of 4 May 2012

$ 606,490

Comment on Model Portfolio activity

There was no activity this week in the portfolio as markets continued at post 2008 high levels and sentiment remained positive. Some former high flyers crashed and burned (Green Mountain Coffee Roasters down 40% in one day and 75% since November) and others (LINKEDIN, Whole Foods) jumped 10% on earnings beats. The positive action is concentrated in the 50 times earnings stocks since at those levels ideas overrule fundamentals. As long as the big boys and girls want to buy, those stocks will continue to rise while the staid blue chips meander. The Facebook offering in the middle of the month may mark the top of this rally.

Some the stocks in the portfolio we sold in February have continued higher but most of the sold issues are 20% and more below our sale prices. Out of favor stocks are certainly not participating as institutions hop on the latest fad-internet social networking. Even Apple is experiencing profit taking.

We are biding our time awaiting the correction.





















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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.