- 30 November 2001
- We raised cash yesterday by selling our trading positions and a few
positions recently initiated in most large accounts. In all accounts we sold
Wells Fargo for even money and the QQQs for a 50 cents per share loss.
Selling these two issues was an easy way to raise cash. We decided to raise
cash because the NASDAQ and S&P 500 are failing in their attempts to make new
highs. Moreover, the coming Enron bankruptcy is being too lightly dismissed
by the markets. We expect a correction and we want to have more cash to place
in issues that have larger percentage return potential, like The Gap and
Tellabs etc. We had purchased the QQQs and WFC to participate in what we
expected to be a strong move through resistance by the overall market. Since
that didn't occur and because Enron "blew up" yesterday, our discipline
suggested raising cash. We sold Schwab, Cisco, Sun Micro, Compaq, and
Starbucks in our trading accounts for an overall loss of about $2000 per 5000
shares (1000 shares in each stock). We also sold Schering Plough in our
trading accounts and in our smaller accounts for a 50 cent per share profit.
(Not yours TD.) Hopefully we were wrong and the market will move
substantially higher from here. If so, we own enough volatile stocks to
- 29 November 2001
- Enron finally blew up yesterday. An accident waiting to happen. All the
analysts on Wall Street thought Enron was a can't lose buy at $50 per share.
At the top it sold for $85 per share. Now at 67 cents per share, that's
something like $80 billion dollars in market value gone. Include debt of $15
billion and we are talking about some real money down the drain. As we said
earlier this month, Enron is the outfit that caused the California
electricity crisis last winter. Guess they laughed all the way to bankruptcy.
Interestingly, a lot of the company officers sold stock at much higher prices
while lowly employees were prevented from doing so. No one will go to jail.
Too bad. And so now we know how unregulated deregulated utility markets work.
Everyone but a few insiders lose their shirts.
Speaking of analysts, an analyst at Prudential placed a sell
recommendation on Gaps Stores yesterday. Before yesterday day she had a hold
on the stock. Probably had a buy on the stock at $20 and a strong buy when it
was $30 per share. That's the way analysts work. The Prudential analyst also
said that Gap's clothes were not attractive. Lemley Yarling analysts, who
have many years experience shopping at all the specialty retailers, believe
that Gap is finally returning to the formula of wearable sweaters, shirts and
slacks that made them the place to shop. We are sticking with our own
analysts' call since they had the courage to back up their opinion with our
We bought some Rite Aid at $5 yesterday, sold our Limited trading
position for a $200 per thousand shares gain because we want to concentrate
on The Gap. We also repurchased our trading position in Compaq at $9.40. And
we sold our GM position for a $1000 per thousand shares gain to concentrate
on Ford. Finally we added Tellabs to some accounts that already own it, as it
dipped below $15.
The markets have to digest the Enron news so we expect the sell off to
continue a few more days. We'll keep adding stock since we now have a reason
for the sell off and the correction should set up a nice year end rally.
- 28 November 2001
- Take a day off and look what happens. The markets need a breather and since
we don't want a really strong rally till after year-end we are glad for the
pullback. We would like to be able to buy back the Broadwing that we sold for
a tax loss in early November. So we are glad to see BRW's price rebound slow
down. We may also add some more Rite Aid on this pullback. Don't know what
today will bring.
- 27 November 2001
- The markets moved a little higher on Monday, and most of our stocks had a
good day. After talking with our daughters over Thanksgiving, we decided to
repurchase The Gap just under $15 per share in most accounts. We don't think
same store sales troubles are over for GPS, but the markets seem to be
looking forward and we have always had a soft spot in our heart for this
stock which has made so much money for us over the years. We were hoping it
would dip under $10 per share this fall but that didn't happen.
Several clients have remarked about Wild Oats Stores in e-mails recently.
We know we may regret not purchasing the stock, but we don't like their debt
situation. OATS had to get a waiver on their debt covenants. Also the store
we shop at in Evanston is not well maintained and the checkout folks are not
friendly. We said last week that we have to be comfortable with a stock to
stay with it. OATS just isn't a red cow for us.
We also added some Lucent today at $7.98 per share and bought QQQs, the
NASDAQ 100, in accounts holding Wells Fargo. In answer to another e-mail
question, there is no connection between owning Wells Fargo and the QQQs,
except that the accounts that own WFC are of the size we want to own the
QQQs. And also folks who know they own Wells Fargo and read the daily
thoughts will now know that they own QQQs at just under $40 per unit.
We are off to Madison today to pick up Katie, and Kathy is at a charity
affair. So Sharon is holding down the fort. The markets should continue to
- 26 November 2001
- We think the markets will continue Friday's move higher in keeping with our
day after Thanksgiving theory. It's getting a little late for any more
selloff in the overall markets, but individual stocks could still suffer or
remain stagnant. Except for our trading accounts we don't expect to be active
for the next few weeks.
- 25 November 2001
- My daughters have informed me that The Gap has begun to return to its old
tired and true formula of sweaters and pants and shirts that fit normal
people. They also have given up the neon fashion look for more normal colors.
We may have missed an opportunity in that stock, but our retail luck has not
been fantastic lately and so we may continue to pass on retail stocks. we
have mentioned that we view most stocks as anchovies or trades now since we
are not convinced that the economy is going to stage a strong recovery any
time soon. Our optimal scenario would see a good new year rally that would
allow us to get back to cash, coupled with a rise in two year rates to the 5%
level so we would have some place to park the cash. With two year rates a
shade over 3%, that scenario may seem fanciful. But, six months ago two year
rates were at 5%. We think the markets may wish an economic recovery and at
the same time bond market fears of one may move interest rates higher.
Anyway, that's our hope.
We added a few more stocks to the Model Portfolio over the past weeks.
Since we've owned them all before we won't dwell on them. Just remember we
bought them as a package and as trades. The Model is at its high for the year
and yet most of these stocks are well off their highs. Also since most of
them are highly volatile we don't feel the need to get fully invested to
realize a decent return.
- 24 November 2001
- Since the markets acted as we expected on Friday we added a few more trading
positions. Since we just can't buy Gap Stores because we don't like their
clothing selection, we purchased Limited Stores in our trading accounts at
$13.50. If it moves lower we may add to other accounts. We also repurchased
Cisco at $19.50 for a trade, and Philippine Long Distance Telephone at $7.50
as a play on better U.S. - Philippine relations, also as a trade.
We'll review our stocks and post the revised Model Portfolio on Sunday.
- 23 November 2001
- The Friday after Thanksgiving market often signals whether the next few weeks
will be up or down. That's because, absent any market moving news, only the
most diehard traders/investors have any interest in the half day session. We
expect today to finish on the upside because Wednesday's selloff seemed half
hearted and bids were present at the close. Markets close at noon central
time today and so do we.
- 22 November 2001
- The markets meandered yesterday with no discernible direction. We forgot
to mention that we traded out of our Marathon Oil purchase on Tuesday for a
$1250 gain per 1000 shares net of commissions. We needed the gain since all
our other recent purchases seemed to decide to head south for the week. We've
been expecting the pullback so we aren't surprised and since tech is more
volatile on the upside, we expect the same on the downside. The up movement
of the five days before yesterday in tech is an inkling of what we expect in
the one week period after year end. We still have more powder to put to work
and so we will continue to pick and peck our way through the minefields of
year end tax selling.
Happy Turkey Day !!!!
- 21 November 2001
- The markets used Tuesday as a consolidation day after the big 20% run up from
the September lows. We added a little Rite Aid and bought back Tellabs in
larger accounts when it sold off over a dollar per share. We had sold the
Tellabs earlier this month for a small gain and this is another stock we are
buying back higher. The reason we sold it was that TLAB was scheduled to
announce another restructuring and at the time the Afghanistan action was not
favorable and we were unsure how the market would greet the restructuring
move. Alas, the restructuring announcement was made last week after the
foreign news turned in favor of the U.S. and so there was no selloff in the
A comment on farmers, red and black steers, and trading stocks.
Farmer Pete, as my grandson Tyler calls him, lives down the road a piece
from us. At one mile he is our nearest neighbor which suits us all just fine.
Can't even see his security light. For those of you who don't know, security
lights are bright globes that come on automatically at dusk and shine
brightly all night, illuminating the barnyard and half the countryside. Why
they are called security lights is beyond us, since their brightness provides
thieves the light needed to see their way around the farm. Whatever, city
folks who move to the country rarely have security lights because one of the
reasons they moved to the country is to get away from bright lights.
Anyway, Farmer Pete runs cattle on our farm. Each fall he sells his
steers and bull calves, which he did last week. A few days after he shipped
them we asked how he did on price. Without revealing too much, which of
course is the country way, he allowed as he got 82 cents a pound for the
black ones and 76 cents for the red ones. We asked why he got different
prices since all the cattle were in good shape and about the same except for
the color. His response was that the cattle buyers usually prefer black ones
and so they usually pay more for them. We then asked him why he didn't raise
all black ones, since he'd get a higher price for them. His response was
simply, "I like red ones better."
Makes sense to us since that is usually our response when folks ask why
we trade certain stocks when other stocks sometimes move better. As traders
we have to own stocks with which we are comfortable. A good example of this
philosophy was our catastrophic Barnes & Noble trade last week. We lost a
good piece of change on the trade and this week the stock is back to our
purchase price where we could get out even if we still had it. We have
learned over the years that when a trade goes against us and we hold to get
out even, our mind tends to focus on the bad trade to the exclusion of other
opportunities. In this case, having taken our lumps and moved on, our
accounts are back to their pre-Barnes & Noble trade value and our mind has
been clear to focus on other more comfortable opportunities.
Finally the values requested are 53,93,331. Happy pre-turkey day. We'll
be with our grandchildren all day but Kathy is holding down the fort. There
will be comments every day this week for the hard core readers.
- 20 November 2001
- The markets moved higher yesterday, and we gave in and bought Ford at $17.50
in many accounts. We also added some of our recent stock purchases to smaller
accounts. We purchased Marathon Oil in our trading accounts after the
Phillips Petroleum - Conoco merger was announced over the week end. We had
been hoping to buy Phillips under $50, with the expectation of an eventual
takeover. With the Republican oilmen running the government we expect the oil
patch consolidation to continue without much interference. And, because of
its size, Marathon is going to have to find someone to buy it. We bought MRO
as a trade right now but if it moves lower we may get more serious about it
as a year end purchase. For the same reason that oil prices can't stay at $40
per barrel, we don't think the pendulum will allow them to stay down. But oil
stocks may be under selling pressure through year end. The New York Times
wrote an article on Sunday about Jack Grubman, a telecom analyst who has
been less than stellar in his predictions over the past few years. Coupled
with the retirement of Henry Blodget, the fellow who made the Amazon going to
$400 per share prediction a few years ago but forgot to tell folks to sell,
the press hasn't been too kind to gurus lately. Our wonder is why are they
are telling us now. To our mind the press Stories are two years late and many
dollars short. Well, at least we told you so.
- 19 November 2001
- A new week begins. With options expiration on Friday not causing much mayhem,
we don't expect any huge volatility today. Harry Potter was a big hit, this
is Thanksgiving week and the war is going well so as we said over the weekend
we have the sense that an era of good feeling in the markets will continue.
The action in the bond markets last week where rates rose and prices dropped
signaled recovery ahead in the economy. We are more sanguine on long term
prospects for the economy, but we think short term through year end we have a
chance to add a few dollars to accounts by our trading. We will keep a large
cash position, but also plan on adding to our established positions.
- 18 November 2001
Our weekly adjusted Model Portfolio as of 18 November 2001 has been posted on
the Model Portfolio page.
Several clients have e-mailed to remind us that we are repurchasing stock
this week that we sold last week at lower prices. Our response is that last
week when we sold we were expecting a pullback. More importantly, the
Northern Alliance and US forces weren't doing well in Afghanistan. On
Wednesday of this week, when it became clear that the US was winning big, one
very large uncertainty was removed from the markets. Seasonally, the market
often sells off for a few weeks in December, but the timing of the big down
this year was mid September not October as has been usual. So, even though
the market needs a pullback, we are guessing that maybe the push higher will
continue. Greed is coming back strong. Remember, we are only trying to catch
the year end bounce. All stocks are anchovies to us. Anchovy stocks are for
trading, not for keeping. The easiest course was to go back into stocks we
know and want to own. The reality is that all stocks are higher than they
were a week or month ago. The stocks that are still moving lower should
probably be avoided until they turn higher or until year end, whichever comes
We still are long term negative but we feel that sentiment has turned and for
the next four weeks pre announcements will be few. SBC moved higher after we
sold it, but as we said at the time we wanted to use the money to buy more
aggressive stocks which would require less dollars to get the same dollar
movement. Happy Sunday!
- 17 November 2001
- Ford continued to elude us yesterday as the markets vacillated with options
expiration skewing results. Today marks the beginning of deer hunting so we
will spend the day hunkered in our bunker avoiding winged missiles. Not quite
Afghanistan but... Yesterday we repurchased EMC at $16.22 in accounts
holding Oracle. We did this because the Janus funds reported that they had
sold forty-million shares of EMC in the last quarter, leaving them with six
million. An example of the buy high - sell low tactic that they have
perfected over the past 16 months. We guess that most of the hot shot funds
are now out of the stock so while it may not go anywhere till after year end
we are willing to take the 3 point downside risk of owning it for the next
month. Lucent completed the sale of its optical fiber division for enough
money to pay off all long term debt. So we added a few more shares at $7.90
to some trading accounts. We also repurchased Sun Micro at $13.55 in some
trading accounts as well as Starbucks at $17.37. We also added Qwest at $13.62
to some larger accounts. Even with these purchases we have a good cash
position for any pullback. We'll post another comment later this weekend.
- 16 November 2001
- The DJIA closed higher on Thursday, with the NASDAQ and S&P 500 each off a
little. We had the bright idea of switching our SBC to Ford since we have
exposure in the telephone area with Qwest and Broadwing. We wanted to buy an
auto stock and since we own a Volvo we chose Ford. We were able to sell the
SBC at 38 for a small loss (actually a small gain in those accounts we bought
it for yesterday). We missed buying the Ford at $16.50, so we will try again
today. Today is an options expiration day so the markets may be volatile. We
also purchased a small amount of UAL in a few aggressive accounts. And we
bought back EMC in our trading accounts. We still look for a pullback and so
we are happy to have raised a little cash with our SBC sale. We would rather
put that money to work in a few lower priced stocks with better percentage
gain potential. Also we were not happy when SBC sold off after we purchased
- 15 November 2001
- The markets inched higher yesterday as retail sales were up seven per cent
because of 0% auto loans. Excluding auto sales, retail sales were up 1%. We
continue to expect a pull back in the market. We added Rite Aid, the
drugstore chain that ran into financial trouble last year, to all accounts
that hold Lucent. The fellows who ran the chain were lousy and new management
came in. New management has been paying down debt which is still over $2.5
billion. RAD will survive and we are only buying for a trade after year end
when the selling pressure will abate and we could get a 40% pop in price.
Paid $5.15 per share. We continued to add Schering-Plough and SBC and Lucent
to accounts and took our one day $1.20 per share trading profit in Compaq. We
are adding slowly but steadily and would like to be 40% to 50 % invested by
year end. But we aren't going to force it.
- 14 November 2001
- With the positive news from Afghanistan and the realization that Monday's
airplane crash was not terrorist caused, the markets rallied on Tuesday. We
did a little buying adding Oracle at $15.15 per share and in the same amount
to accounts holding Lucent. We are gingerly beginning to do our year end
buying in case our late November flop scenario doesn't occur. We also bought
Schering-Plough at $35.80 and in the same amount to accounts holding SBC.
We've had luck trading SGP and hope that luck holds. We started buying Wells
Fargo Bank in larger accounts at $42.60 and also re-established our Compaq
position in our aggressive trading accounts. We are looking at Xerox and
Rite-Aid as anchovy trades at year end.
For now, we are taking it one day at a time, and are sticking with quality
- 13 November 2001
- It was hard to concentrate on the market yesterday. Rather, we were feeling
sympathy and more for the victims of the plane crash in New York. An event
like the crash surfaces all our feelings of care and concern for friends and
loved ones. Caring is the good - and the hard - part of being human. Shalom
- 12 November 2001
- Enron is being acquired by Dynergy Corp for about $8 billion. Enron is the
energy trading firm that created and exacerbated the California electricity
pricing crisis this past winter. Enron also had excellent connections to the
Bush White House which is probably one of the reasons Enron was able to get
away with the "hold up" - to use a Bushism - of California consumers. There
is more to come from the downfall of Enron and we wonder whether Dynergy is
trying to save itself. Supposedly, Dynergy conducted due diligence in five
days. Get real. Enron's and Dynergy's cowboy tactics last winter were a
travesty and a terrible tax on the people of California. Their actions ruined
two utilities, and cost California taxpayers billions. The FERC had the
obligation to control prices for the greater good, and because interstate
commerce was involved they had the legal basis. But the cowboys in Washington
only want federal intervention when it involves the bedroom or welfare folks.
Too bad. And another reason for the downturn in the economy. The Enron affair
is a travesty that cries out for investigation and punishment.
- 10 & 11 November 2001
- The markets finished the week with a nice gain, with the DJIA and S&P 500
both up over 3% and the NASDAQ up 4%. As our accounts didn't go down much
last week they didn't go up much this week. We closed out the Barnes & Noble
trade on Friday for a loss of $2900 per 1000 shares. Ugh! We were so sure
the trade was going to be a money maker that we took larger than normal
positions in most accounts and as a result the accounts lost about 1% in
value on the close out. Happily, most of the accounts in which the trade
occurred are still up 15% to 25% for the year versus the S&P 500's negative
We are now making our year-end list, and checking it twice. We may start
easing into our year end stocks after Thanksgiving. One stock that has been
moving lower that we like to trade is Schering -Plough and we may do
something with it this next week. Other than that and some trading in our
very aggressive accounts, which number about ten, it should be all quiet on
the home front.
We remain risk averse and our outsized gain for the year has given us the
luxury of maintaining a large cash position. Our activity has been hectic at
times, but that is our style and it has worked well for us the last three
years. Moreover these are confusing times. The USA is going to survive all
the turmoil and the long trend has always been up. But periods of
consolidation and even retrenchment are part of economic history and we may
be in just such a time. The real question is how much negative economic news
the ever optimistic American investor is willing to absorb before heading for
and/or staying on the sidelines. Our guess is that we are at or approaching
the limit. Even with 1% or less interest rates the Japanese investor has
pretty much stayed on the sidelines for ten years. To be sure, there have
been some very good rallies in the Japanese market over the last ten years.
Unfortunately the "buy and hold" crowd haven't done well since the Japanese
market is back to its ten year low.
Our week-end weather promises a few more days of Indian Summer so it's time
to go and dig potatoes. We especially enjoy the fun and surprise of finding
big tubers as we turn the ground. And when they are baked and eaten with
butter or olive oil all the summer weeding is well rewarded. Also, today is
the big basketball game, the Northern Kentucky University Norse who are an
NCAA Division II powerhouse visit the Cincinnati Bearcats, a NCAA Division
I powerhouse. Go Norse !!!
Model Portfolio as of 10 November 2001 has been posted.
- 9 November 2001
- Yesterday we sold our position in Qwest at 12 for loss of one point in most
accounts. We also tried to trade Barnes & Noble after the stock opened $10
lower when BKS announced lower earnings to come for the quarter because of
lower sales over Halloween. We bought the stock in our trading and larger
accounts with the idea that we would trade out of half the position and hold
half. Unfortunately, the stock dropped a further three dollars by the end of
the day. In keeping with our original intent we sold half our position for a
$3.25 loss. That's the largest loss we've had on a trading stock this year
and it reminded us very painfully that we are not yet masters of the
universe. Hopefully we'll be able to work out of the remaining shares without
too much more damage. Ah well, today is another day and TGIF.
- 8 November 2001
- We sold Broadwing for a loss in taxable accounts only on Wednesday. We think
the present rally is running out of steam and may take
our loss on the Qwest trade in hopes of buying lower at year end. It isn't
good trading policy to only sell winners.
- 7 November 2001
- Several folks thought our morning comment was very doom and gloom and so we
offer our poem as a reminder that there is another world outside of Wall
Street and the New York/ Washington axis. And most folks live in that other
Indian summer’s upon us now,
with third crop hay safe in the mow.
The corn is picked and cribbed up tight.
The full moon shines in broad daylight.
For those few left who till the soil,
they’ll finish soon their yearly toil.
The cattle cud the frosted grass,
with bull calves shipped for ready cash.
The woods are bare and full of deer.
Soon eager hunters will be here,
hoping fresh snow will ease the stress,
of proving once more their manliness.
Thanksgiving is this time of year
and kinfolk choose to gather near.
Up here our kin are friends not blood,
They share our deep felt peoplehood.
So let the snow begin to fly,
and cold wind sweep away clear sky.
We’ll hunker down with wood piled high
reading saved books through longer night
waiting the redwing blackbirds flight.
- 7 November 2001
- The Fed cut the Fed Funds rate to 2%. That level hasn't been seen for forty
years, except in Japan. Major league baseball is going to get rid of two
teams. Not move two teams, actually dissolve two teams. New York faces years
of rebuilding. A new mayor has to learn the system. Media spends all its time
talking about anthrax and when that becomes
boring smallpox takes its place. Five million, that's 5,000,000 as in one
thousand times the number of people who
perished on 9/11, face starvation in Afghanastan this winter. Maybe we are
unusual, but the news out there doesn't seem conducive to inspiring folks to
go hog wild on their spending.
Rate cuts at these levels are hurting savers. Folks who have been prudent and
patient and non speculative are being used by Washington as the voiceless
funders who will rebuild the capital of the high rollng banks and brokers.
Just like 1990 only more so. The brokers and gurus say cash is trash, buy
stocks and high yield bonds. Shame! It's not different this time. It's just
like it was at the end of 1968. New highs never to be pierced for 12 years.
September 11 was a travesty, and a tragedy. But because the USA was attacked,
and because the USA has chosen to fight back, it does not follow that the
markets are through their time of trouble.
Yesterday on the Fed inspired rally we sold EMC at $15,
Tellabs at $14, and Sun Micro at $12.16. All
represented profits of 20%. Quest and Broadwing remain our dogs and hopefully
the rally started today will give our dogs some lift.
- 6 November 2001
- We sold our EMC trading position put on last week for a gain of $1714 per
1000 shares. We continue to hold our basic position in EMC. Over the week end
we decided we would take a chance that Eastman Kodak will trade lower when
they cut the dividend and so we sold our position established last week
basically at even money. Tellabs announce they wil be taking a writeoff for
eliminating production of a product line. They will announce the charge later
this month. We may sell our position soon. Ciao.
- 5 November 2001
The DJIA lost 2.3% last week, The S&P 500 was down 1.6 % and the NASDAQ
dropped 1.3%. Most of our accounts were unchanged. That's the value of a
large cash position in failing markets. Of course, if a rally starts we are
not going to participate fully. With our performance for the year plus 40%
and more versus the popular indexes and averages that's a give up we are
willing to accept.
The real question is when the markets will start looking out the proverbial
six months and what they will choose to see. Wall Street Wisdom expects the
markets to predict what will happen in the future. Since so many gurus are
predicting recovery next year, a rally of some sorts is in the cards. But if
it doesn't occur in the next week or two then we think any rally will be
like last year. That rally was a short and sweet three day affair in early
January and was the result of the first Fed rate cut and the catch up being
played by oversold year end tax loss stocks. We see the same scenario this
year, minus the surprise fed rate cut. Shalom.
- 3 & 4 November 2001
First another correction. Qwest is Qwest and Nachio is really Nacchio.
Enough. On Friday to raise a little cash because we were nervous, we closed
out trading positions in Tellabs, Cisco, and Sun Micro that we established on
10/30 and 10/31. We kept our basic position in TLAB and SUNW. On a 1000
share trading position we lost $203 in TLAB, and made $1427 on SUNW and $654
on CISCO, all net of commissions. We also closed out a trading position in
AMD for a $440 loss to establish a position in Schwab. The AMD trade hurt
since it moved substantially higher immediately after we sold. One trade too
many. We also bought Ciena as a trade in some aggressive accounts at $16.35
Reviewing the stocks we now own: Barnes & Noble.com continues to float along
at $1 per share. We own at a $2 cost. We think this is a dot-com survivor and
wouldn't be surprised if Barnes and Noble bought the shares it and
Bertlesmann don't own back. Broadwing has continued to sink as we mentioned
it might. We will add more later this month or next if it goes lower. EMC is
acting well, by holding its current price. Eastman Kodak is a trade, we hope.
They will probably cut the dividend but rumors of its demise are ridiculous.
That doesn't mean the share price can't go lower though. With a cash flow of
$6 per share and debt interest coverage of 10X, our trade in it should work,
although we may have to wait till after year-end unless the markets rally.
Lucent is an after year end rally stock. Same for Palm and Quest. We've made
good relatively riskless trading money buying SBC at these prices before. We
may repurchase Bellsouth next week for the same trade. We own Sun and
Tellabs for after year end moves. We own all these stocks for trades because
we remain very negative on the longer term market outlook.
Finally, we offer the following poem as our affirmation of the mellowness of
autumn and our recognition of the melancholy of this time of year, most
especially this year. Shalom.
Is it the damp cool smell of
the woodfire returning love
from burnt death in a speeding
of the eternal process ?
Is it the final burst of color in leaves
making their mark in a
heartless appreciative world ?
Is it the now brown thistle
floating unsure seeds as it crumbles
to rebuild the life of earth and folkkind ?
Is it the everflowing spring'
no longer needed and yet
impervious in movement ?
Or is it just being able to know
that we will not end
when the snow falls ?
- 2 November 2001
Maybe the rally we've been predicting for the past few days started
yesterday. At least the stocks we bought for the rally stopped going down. It
will be interesting to see if we can continue in rally mode today given that
traders will be wary of holding positions over the week-end. We are through
buying for now. We'll see how our trading ideas work out. Remember, the new
Autumn 2001 Lemley Letter has been posted on the website. Enjoy your e-mails.
- 1 November 2001
We were just informed by e-mail that Qwest is Qwest not Quest. So though we
don't know how to spell the stock we do know what they do. And to answer the
second e-mail, Qwest is the old Regional Bell Operating Company ( RBOC) known
as US West. A fellow named Joe Nachio took it over and for a while he was the
darling of Wall Street. But now when we are in a different time he is in the
doghouse which means that Wall Street doesn't like Qwest any more because
its' stock price has dropped precipitously. If we buy Bellsouth back if it
goes lower, we'll own three of the four surviving RBOCs and be able to
collect $100 if anybody lands on our space.
- 1 November 2001
Rabbit Rabbit !!! The new Autumn 2001
has been posted. We will
still be sending the snail mail Lemley Letter next week to all clients since
95% of our clients don't believe in and/ or own computers. The stock markets
held their own for the last day of October. As we said yesterday we added SBC
to the Model Portfolio and today we purchase Quest at $13.04 per share and
Eastman Kodak at $25.4552 per share for the Model Portfolio. We bought Quest
in most large accounts . We didn't place EK in all accounts. In trading
accounts including our own we bought Compaq at $9.10 per share. After the
markets re-opened on September 17; and the DJIA dropped 700 points, SBC
closed at $44.30, EK closed at $40.73 and Quest closed at $18.57. Since then
all three companies have announced troubles but we think the selloff in
these three presents a trading opportunity. So we'll see how things go. We
are a little more committed to stocks than we like, but when opportunities
arise and we think the potential for 20% over a short period presents itself
we are willing to take the risk. Hopefully awaiting the rally we've been
predicting we wish all a good day.