Lemley Yarling Management Co
309 W Johnson Street Apt 544
Madison, WI 53703
Toll free phone numbers:
21 November 2008
We are going to be traveling for the next two weeks.
There will be no regular posts. Any transactions will be noted on the day they
occur. We were going to try to post but then we decided that folks are spending
too much time reading conflicting views and hearing the media blabbering about
the next depression and the end of the U.S. Financial system. We don’t think
either will occur and there is nothing we can do about it anyway. We own good
stocks at great prices and have a cash reserve in every account that takes
withdrawals sufficient to last three years. More than that we cannot do.
We return on
We arose with the
thought that if we were buyers of stocks at 1000 on the S&P 500 and 900
that we should also be buyers at 750,. And so we have added to positions and
initiated some new ones when the markets sold off this morning. Please see the
We own small amounts
of a lot of securities. We could buy index funds, and we have a few; but our
thoughts are that we want to won stocks that we know or for a specific purpose
as in our package of retailers.
This market has been
especially difficult. But we are closer to the end of this selloff now. The end will come. We have told clients to not
look at their statements until they read that the S&P 500 is back at 1000. As
we said above we have enough cash in accounts for those who need it to provide
for the next three years.
This too shall pass
and we will reach the other side of the chasm.
As the markets entered
the last hour CNBC announced that Tim Geithner of the NY Fed would be Obama’s
Treasury Secretary. And it was also leaked that Obama would personally announce
his choices for the Treasury and related posts. The timing of the announcement
was as important as the announcement (15 minutes into the final trading hour on
an options expiration day) since it demonstrated market acumen, something the
Bushies never understood.
The DJIA closed up 500
points at 8050. The S&P 500 was up 48 at 800 and the NAZZ gained 66 to 1382.
Volume was 10 billion.
All will be well.
20 November 2008
All the technical folks are
predicting Armageddon because support was broken on the close yesterday.
Moreover the markets have the feel and the look of the week before the Crash in
We bought four blue chip stocks
and GE when the major measures were down 3% yesterday. To adjust holdings in the face of the volatility
and our musings on our walk last night of a Monday collapse we are going to sell
half the position in of the four stocks (JPM,
MRK, DD, and T) that we bought yesterday. We are also selling all the GE since there is news this morning
that the company is approaching sovereign wealth funds for more capital. CEO
Immelt said a month ago on CNBC that GE didn’t need any capital. Since then... The shorts are going to jump on that news and
will try to make GE the next AIG.
Asian markets were lower by 3% to
6%% overnight and European markets are 2% to 4% lower. The only good news is
that by Christmas happy times will return because at the rate markets are
falling they will all be a 0 before Christmas.
Oil is under $50. Several years
ago we remember writing that markets wouldn’t rally until Oil traded back to
777 and 760 are supposedly
support number on the S&P 500. We may find out today.
After dropping 200 points in the first hour and the
S&P 500 touching the 777 number the markets rallied back to even off the
low. There was major program selling in the major bank stocks forcing their
prices down 15% in the first hour and at the low of the morning we repurchased the
JPM that we sold on the opening $3
lower than we sold. Unfortunately we were greedy and didn’t sell the shares we
repurchased during the day when we had a $2 profit and instead sold them on the
close at a loss.
We added the SPDR
Major Bank Index (KBE to accounts in which we sold half positions in DuPont
and replaced the GE we sold with SPDR
Financials (XLF) under $10. The Financials have been causing us pain but we
expect them to perform as the major bank stocks did coming out of the 1990-1991
financial turmoil. And we added the NYSE (NYX)
to our retail package. It isn’t a retail stock but it is at $18 down from $100
and has a 5.3% yield. We also added to our LIZ
At 1pm the markets are flat as
Paulson begins talking. We’ll see if he has the same effect as Bush.
European shares closed 2% to 4%
lower. Oil lost $4 to $49. Gold gained $6 to $738. The Treasury two-year is now
yield under 1% and the ten-year is 3.13%.
No bailout for the auto industry today. The Congress is saying wait
till December and try harder and suggesting the auto CEOs drive to Washington
wearing sack cloth if they want the loan.
The DIJA dropped 444 points today
(6.2%) and the S&P 500 was down 54 at 752 below the low in 2002. The NAZZ
crashed 70 to 1316.
Breadth was 10/1 negative again
today on the NYSE and volume was crash active at 11 billion shares.
Combined new lows were about 2900
which suggest we are nearing at least a temporary bottom. In the last
conflagration a month ago new lows were about 3600.
The bears are in control. The SEC had better change the short rules or 5000 on the DJIA will soon be
in the bears sights.
19 November 2008
The tech guru we follow suggests
that the last hour surge yesterday was the result of the closing of the InBev/Budweiser deal which removed $5
billion in vale from the S&P 500 Index funds. Those funds didn’t have to
sell (they received cash for their BUD shares) but they did have to buy $5
billion in shares of many other companies at the close. This is an example of
how computer trading affects stock price movements.
Asian markets were mostly lower
except China which gained back 6% of the 7% it lost the day before. European
bourses are 1% and more lower at midday and U.S. futures suggest a lower
opening. Gold is up $6 and Oil has a $53 handle. Treasuries are firm.
The October CPI was down 1%, the
most in many years. Housing starts are also lower.
We guess it could be worse:
Citigroup's Corporate Special Opportunities (CSO) hedge fund is
being liquidated after losing 53% of
its value last month. Investors in CSO, which managed nearly $4.2B
at its peak, will likely receive no more than ten cents on the dollar.
Thanks a lot Ken:
The chief executive of a major
U.S. bank that received $25 billion from
the government's financial bailout package said Tuesday that federal aid
shouldn't be dispensed to the ailing Detroit Three automakers -- unless they
become the Detroit Two. "I think there's one too many" automakers,
Bank of America CEO Kenneth Lewis told the Detroit Economic Club during a
meeting in Cobo Center, the downtown convention center that's home to the North
American International Auto Show each January. He added he would require
consolidation if he was deciding on a bailout. "I think the American
people are suspect of just giving more money and buying more time," he
told reporters after the speech. "They want to see that the companies have
in fact changed and the strategies have changed.
JP Morgan is down 10% touching its 6 year
low and yielding 5%. We traded off this level in July when most of the bank
made their lows. We traded the stock and made a few points and then watched it
run to $54 afterwards when the short ban was placed in effect. We have no
reason to believe it will move that high soon but we did resolve that if JPM
revisited this level we would buy to own and we did that today. The shares are
down 25% this week.
We bought DuPont
yielding 6% and at a twelve year low. We repurchased Merck at a 5.8% yield; AT&T
at a 6% yield and we just can’t resist GE
at an 8% yield. We have traded all four of these stocks profitably in the last
month from these levels although because of their yields we are inclined to
hold them this time as investments for the other side of the chasm.
Two hours into the trading
session the major measures are again testing their lows.
Shorting Retailers and Banks is the current wisdom in
hedge fund land. Great values are being created if one can survive. That is the
reason we raised the cash we did yesterday. Retail will surely suffer in this
recession and there will be bankruptcies and consolidations but on the other
side big money will be made as these same short sellers crowd in on the buy
We are adding a package of 8-15 decimated retail stocks
to our portfolios. In November 1974 the ‘old
stock broker’ prepared a list of 10 REITS and 10 stocks selling under $10
for clients to buy in a package. The idea was that if 1 or 2 went broke the remaining
8 would eventually return much more than the losses from the two. In fact none
of the REITs or other stocks in the two packages went under and the returns
were a double to much more depending on how long folks held.
We are doing the same today. We know there are retail
index ETFS but in this case we want to create our own package that we think
offers much greater appreciation potential. Given that we are not at year end and - even though the stocks are at
multiyear or historic lows - price risk remain still the bear market ends. That
is why we are buying many issues in small quantities.
We raised cash the last two days for peace of mind. Since
we sold the markets are down another 10%. Buying 5% to 8% dividend payers down
10% and more from yesterday morning and the retail package doesn’t disturb our
peace of mind. In the Model Portfolio the JPM purchase and the entire 15 stock
package amount to 23% of available cash on JPM, MRK, DD, T, and GE and 6% on
the package which leaves us with 32% cash in the Model Portfolio and more in
Our accounts will be
more volatile to the downside than the markets because we are investing in
Financials and Retail into the teeth of the short sellers. We have always been
contrarian investors because that is where the value is and we know that all of
these companies are not going broke. In fact if more than one does (CWTR) we
will be surprised. And we know that on the other side of the valley we will be
The Retail Package
Fitch (ANF) is down from $84 to $15 this year and actually yields 5%
at this price. The shares are priced at 3X trailing earnings which demonstrates
the earnings power of this company in good times. Cash is $300 million and debt
is $100 million. ANF will certainly be a survivor and we made a ton of money on
this stock in the 1990s and left even more on the table. Insiders own 15% of
Barnes & Noble (BKS)
has no debt and yields 6% at its price if the dividend holds. The shares are
priced at $13 down from $40 this year. From the WSJ:
The chairman of Barnes & Noble Inc. last week told employees via an
internal memo that the nation's largest bookstore retailer is "bracing for
a terrible holiday season," and that he expects "the trend to
continue well into 2009, and perhaps beyond."
In his memo, Leonard Riggio, the retailer's largest shareholder, noted
that comparable store sales, a key retail indicator, recently declined for the
first time in the retailer's history.
"Never in all of the years I've been in business have I seen a
worse outlook for the economy," wrote Mr. Riggio. "And never in all
my years as a bookseller have I seen a retail climate as poor as the one we are
in. Nothing even close."
Barnes & Noble employs an estimated 40,000 people. Barnes &
Noble shares (BKS) are currently trading at $18.55 on the New York Stock
Exchange, off a fraction, but down sharply from its 52-week high of $39.52.
The ongoing economic crisis will have a direct impact on the retailer's
plans for new growth. Mr. Riggio wrote that the chain will "curtail
greatly" the number of new store openings, and that discretionary spending
will be cut sharply.
Barnes & Noble's Memo
Read the memo that Barnes & Noble chairman Leonard Riggio sent to
his employees about the outlook for the company.
However, Mr. Riggio wrote that Barnes & Noble will maintain its
contributions to the company's 401K plan and intends to pay overtime during the
holidays. The retailer expects to finish comfortably in the black for the year
and doesn't have any bank debt.
"I am saddened by the many stories of booksellers who have taken
big hits in their 401K plans, including many who have a large percentage of
their holdings in (BKS) stock," added Mr. Riggio. "While it may be of
small consolation to you, your losses mirror the losses nearly everyone in
America has experienced, even more so those who were heavily into equities,
especially stock in retail companies."
The Gap (GPS)was
our first big retail home run in the 1980s. In fact it was a twelve bagger in
some accounts. Priced at $10 GPS has $2.50 in cash and no debt. Insiders own
35% and the company is priced at one half of sales, 7X trading earnings and
with a 3% dividend yield that won’t be cut.
is priced at $9 down from $40 with a 6% dividend yield and at 3X trailing
earnings. We are mentioning trailing earnings to suggest earnings power not
what earnings will be in a severe recession. As with most department debt is
large and that is why we are purchasing four (SKS, JWN, M, DDS). Insiders own
Williams Sonoma (WSM)
is priced at 4X trailing earnings with a 7% dividend yield. The shares have
been pounded by short sellers who know that the CEO already sold 3 million
shares to meet margin calls and are hoping to cause more selling from him.
WSM’s exposure to housing is also hitting the shares and as we have mentioned
before market psychology induces selling as share prices drop which is the
opposite reaction to the buying of shares when the price rises as often occurs.
Cash equals debt. Insiders till own 20%. 12 month high was $30.
which is now just Saks stores again after owning a lot of other names a few
years ago, is priced at 8 times trailing earnings and is down from $25 to $3. A
hedge fund from Iceland owned 20% of Saks shares and the hedge fund community
knows that and beside the lousy results we think the selling at higher levels
occurred to trap the long hedge fund which was in trouble because the failure
of the banks in Iceland. We noticed that a Spanish bank seems to have acquired
the Iceland fund position at a price in the high single digits. SKS sells at
one tenth of sales but has a large debt load.
Liz Claiborne (LIZ) has been selling and closing down designer names for
the past two years to focus on its profitable lines. Remaining lines are KATE
SPADE, JUICY COUTURE, LUCKY BRAND JEANS, and MEXX. In addition, it sells its
products under its wholesale-based brands comprising AXCESS, CLAIBORNE,
CONCEPTS BY CLAIBORNE, DANA BUCHMAN, ENYCE, KENSIE, LIZ & CO., LIZ
CLAIBORNE, MAC & JAC, MARVELLA, MONET, NARCISO RODRIGUEZ, TRIFARI, and
VILLAGER; licensed brands, such as DKNY JEANS and DKNY ACTIVE; and non-direct
fragrance brands, including CLAIBORNE, CURVE, LIZ CLAIBORNE, and USHER.
Priced also at one tenth of sales
at $3 down from $25, insiders won 20% and the company does have a lot of debt
that is has been paring through asset sales.
is priced at $1.90 down from $12 this year and $30 last year. With $1.50 a
share in cash and no debt the company is
priced at $60 million net of debt with $1.5 billion in sales and EBITDA of
$100 million. This year should be a breakeven year.
Sears (SHLD) is
priced at $28 down form $100 two months ago and $200 last year. At $200 it was
overpriced, at $28 it may have some value. $28 places an equity value of $3
billion (EBITDA is $2 billion) on a company that has $40 billion in sales.
Eddie Lampert, who used opt be called the new Warren Buffet when Sears shares
sold at $200, is now stuck. Mimicking hedge funds are liquidating Sears’s
shares and since the market is thin and the only buyer in size has been Lampert
who doesn’t have any funds left to do much buying the hedgies have ganged up on
their fellow member and are drubbing the shares to the downside.
is a stock we used to trade and sold too soon. URBN has been the darling of the
momentum funds the last two years and it is now the darling the short sellers. Last
week URBN announced better sales and earnings and the share price dropped
because they were cautious going forward. It is that kind of market. The share
price is down from $35 to $14 which is 10X rising earnings. Sales equal market
cap and URBN has no debt and $1 per share in cash. Insiders own 30% of the
dropped from $54 to $18. Japan is a large market for TIF and with the worldwide
recession the markets have decided that even rich folks are pulling back. The
shares trade at one times sales and 7X trailing earnings. The stock has a 3.5%
which is the old symbol for Montgomery Ward –not a good omen- (and formerly
Federated and formerly Field’s, Dayton Hudson and other local department stores
whose names it should have kept) has a ton of debt and went broke after the
1987 Crash and could do so again. We own it as part of the package at $5 down
from $31 this year and $45 last year.
is in the same boat as Macy’s as far as debt is concerned but insiders have a
large stake (35%) in the company. It ahs been run much more conservatively than
Macy’s. Two hedge funds amassed a position in the shares to force changes and
it looks like their fellow hedgies have ganged up to force them out of their
shares. At $3 down from $25 this year we
aren’t risking a lot of money but will be rewarded by survival. Market cap ex
debt is $200 million for a company with $7 billion in sales.
is a catalogue company that tried to make itself into a retail store chain.
Insiders own a bunch of stock (38%) and still run the company. This is the most
likely not to make it but at $1.50 a share it is worth the risk. The shares
sold at $8 this year and $30 two years ago. CWTR has a net $1 in cash.
Our Retail Big Four
Outfitters is one of our four large retail holdings. The shares are
priced at 5X trailing earnings with a 4% dividend yield. At $8 there is a $2
per share in cash in the company and the whole shebang is priced at 50% of
revenues. Share price is down from $30.
just received a $459 million infusion of cash through convertible preferred
shares. That cash infusion solves any money need they might have had and
effectively pays for the Wild Oats purchase. Sales may suffer in the short term
from the recession but the share price dropping to $9 from $40 this year has
accounted for that. the quality of the food will win out. WFMI sold at $70 in
the nutty period.
J Crew was
priced at $54 last May and $30 two month ago and is changing handed at $9
today. The shares are price at on third of sales. Cheapo.
is also cheap.
XLF yield 6%; JPM yields 5%; Merck
yields 5.8%; DuPont yields 6%; AT&T yields 6%; GE yields 8%; Intel yields 4%; NVDIA
has no dividend; CBS yields 13% and Motorola yields 5%.
European bourse indexes closed 4%
and more lower.
Microsoft says it has no interest in Yahoo and Yahoo shares are down 20% to a new low at $9.50.
Mr. Rumor says that Harbinger hedge fund is selling its NYT stake and
the shorts are on the case.
Oil ended down $ .82 at $53.73.
Gold was up $3 to $736. Treasuries were flat.
The DJIA lost 5% today
and broke the 8000 level.
The DJIA closed down 430
at 7998. The S&P 500 dropped 52 to 806 and the NAZZ crashed 98 to 1386.
Breadth was 10/1
negative and volume was active at 8 billion on the NYSE.
There were about 1700
combined new lows and 20 combined new highs.
The bears are still in
18 November 2008
We have decided that bad news and the pervasive negativity
of the media reporting that news will continue for another month as much lower
Christmas sales, terrible economic statistics, more foreclosures and more bank
failures dominate. We thought the market were making a bottom in late October
which is why we moved money from cash to stocks after holding cash for most of
the year since recovering our early year losses. We were wrong. After bouncing off a bottom twice, the
markets are again at support.
If the major measures fail to hold support this time around
the drop will be another 10% to 20%. Measured against the 50% down the major
measures have already traveled another 15% is not great. But in dollar terms in
accounts it is.
We think that towards the end of December when folks become
less media conscious and more inward family oriented there may be a bottom
formed as occurred in 1974. In early January the media will turn its saturation
attention to the incoming Obama administration and his plans. Obama cannot risk
his authority now by proposing policy actions because the present administration
is going to do its own thing as it has for the last eight years.
As the media concentrates on OBAMA a note of hope and much
less negativity will help restore some confidence in the system and may at
least arrest any more severe downward action. Then it will be up to Obama to
Normally we would say that when tax selling abates in
December the markets would rally from the relief from the selling pressure. But
with hedge fund short selling that scenario may not occur in the New Year. We
realize now that the continuation of short selling in the new year 2008 is why
we suffered the losses we did when the expected relief rally in sold down
stocks did not occur. The short selling uptick rule had been removed the
We reduced our SPDR
Financial Position by half again this morning. We also
switched VECO to NVDIA. And we reduced the Whole Foods position to relatively the same amount of shares per
account as we own in AEO, JCG, and SBUX. With these sales most accounts are back to 50% or more cash.
With the markets down 55% from their highs a year ago a 30% to 40% invested
position is warranted. We miscalculated the bottom and paid dearly for
ourselves and clients; but we are here and not there. In effect the losses we
have incurred for most accounts would have resulted if we had been 40% invested
for the whole year with the rest in cash. That gives us some but not very much
solace. We have been concentrating on the spilled milk for a few days but we
now we are looking for cows to replace the spilled milk. Since we have been
farming off and on for almost forty years we are sure we will.
The markets are trying to hold and there are a few signs of
a bottom forming (including our raising cash). Some gurus want another 20% whoosh
down and if it occurs we have the funds to take advantage of the down. Stocks
are cheap now. The companies we own all have the finances to emerge as winners
on the other side of the bottom. If we were in cash until yesterday we would be
buying these same positions today. That is the measure we use to know whether
to hold. Our dreams of great profits and perfect timing are gone but we know that
as investors the risk/reward ratio from current prices of the stocks we won
justifies holding tehm.
The stocks we own will sell at double or more their current
prices within three years. In between we have no idea where they will be
valued. Realizing that the markets are not acting as we thought they would we
have retreated to sufficient cash holdings in accounts.
We have balanced the cash with stocks that provide a good reward/risk
The Producer Price Index was down
2.8% last month. Stocks were set to open lower in that Asian markets were 4% to
7% lower and European bourse indexes are 3% lower at midday. Gold is down $9
and Oil is flat at $55.
But then Hewlett Packard
pre-announced above expected numbers for its quarter and Home Depot reported better than earnings. That news and the
news that Jerry Yang stepped down as head of Yahoo which revived
Microsoft/Yahoo takeover speculation and caused the futures to move close to
even on the morning.
There is also a report
that John Paulson, the fellow who got the subprime mortgage crisis right and
made billions shorting subprime, is now buying mortgages in the marketplace.
That is good news.
At 12:45pm the major measures are
down 1.5% as the quant program short
sellers try to break the markets support levels. The WSJ printed an opinion
piece on the uptick rule today:
There's a Better
Way to Prevent 'Bear Raids'
The SEC should
restore the uptick rule.
By ROBERT C. POZEN and YANEER BAR-YAM
When U.S. stocks plunged last summer, the SEC adopted
several measures to constrain short selling, or betting that a stock's price will
decline by selling borrowed shares. These included weekly reporting of short
positions by large investment managers, requiring short sellers to line up in
advance borrowed shares, and temporarily banning all short sales in financial
These measures proved ineffective. Even during the
three-week ban starting on Sept. 22, financial stocks fell along with the
market, after outperforming the market prior to the ban. Moreover, the
liquidity of these financial stocks decreased, and the cost of trading them
increased, as bid-ask spreads widened.
Given the continued turmoil in the financial markets, the
SEC should reinstate the "uptick" rule, which helped limit downward
spirals by allowing a stock to be sold short only after a rise (an
"uptick") from its immediately prior price. Adopted in 1938, the uptick rule was repealed by the SEC on July 3,
2007, primarily on the basis of a pilot program conducted in 2005. In the pilot
program the agency compared 943 randomly selected stocks from the Russell 3000
not subject to the uptick rule to the remaining stocks in the Russell 3000 (a
broad-based index of U.S. stocks of all sizes) still subject to this rule.
The comparison was only for six months -- far too brief a
time to draw conclusions about a rule that had been in effect for 70 years. The
comparison also did not take place when repeal of the uptick rule could be
stress-tested: 2005 was a year of rising stock prices with low volatility.
During these six months, the SEC found that the stocks
not subject to the uptick rule had 2% lower returns than those still subject to
the rule. This difference implies that removing the uptick rule goes farther
than the SEC's apparent goal of attaining a neutral environment for stocks. As
explained by a research analyst at University of Tennessee, Min Zhao, the SEC's
lifting of the uptick rule for large stocks in the pilot "is associated
with undervaluation . . . [and makes it easier] for 'predatory' short sellers
to aggressively submit short orders and to manipulate stock price
In today's Opinion Journal
The SEC dismissed this 2% difference as statistically
insignificant relative to the standard deviation of the Russell 3000 during the
pilot period. However, if we eliminate a small number of outlier stocks in that
index with returns over 100% during the pilot period, the 2% difference becomes
statistically significant. More fundamentally, return differences of 2% within
six months are economically important, because annual returns in the U.S. stock
market since World War II average 6% to 7%.
The SEC was warned
by two commentators not to repeal the uptick rule since it limited "bear
raids" -- when short sellers drive down a stock's price in the hopes of
scaring other investors into dumping the stock or triggering margin calls to
force liquidations. In response, the agency approvingly summarized the views of
three other commentators -- that bear raids "are highly unlikely to occur
in today's markets, which are characterized by much smaller spreads, higher
liquidity, and greater transparency than when the rule was adopted 70 years
ago." This summary did not take into account another factor -- the advent
of over $1 trillion managed by hedge funds with the ability to short stocks.
In fact, after the repeal of the uptick rule, there was a
marked increase in the number of NYSE-listed stocks with price drops of over
40% in a day -- a rough proxy for a bear raid. In the 12 months following Sept.
30, 2007, the number of such huge drops doubled as compared to a prior period with
similar market declines and high volatility -- the 12 months following March
The passage of the Economic Stabilization Act of 2008 has
not stopped bear raids, so the SEC is reviewing its tool kit on short selling.
Instead of another blunt tool like a temporary ban, the SEC should promptly
bring back the uptick rule.
Pozen is chairman of MFS Investment Management. Mr.
Bar-Yam is president of the New England Complex Systems Institute.
The share prices of the retail stocks we own are being
forced down by short sellers since that is the current strategy of many hedge
funds. While the share prices of retail companies certainly should be lower
than they were last spring the prices at which these companies currently trade
is the result of unbridled short selling on downticks. Time will eventually
allow us to recover our losses and prosper but it is frustrating to know that
the failure of the SEC to understand markets is causing so much pain to
ordinary investors. The SEC changed the
rule to benefit the quant hedge funds that found it impossible to write a software
program that would allow them to sell short on their computers with the uptick
rule in place. A six month study in a time of rising prices when hedge
funds were triple long instead of triple short demonstrates the total
inanity of the Cox led SEC.
European indexes closed higher on
Tuesday and Oil was pennies lower at $54.60. Gold lost $7 to $735.Treesduires
rallied with the two-year at 1.12% and the ten-year at 3.53%.
The DJIA recovered from a 2%
loss, which sent the number below 8000, in the final hour to close higher on
the day. At the close the DJIA was up 150 at 8423. The S&P 500 gained 10 to
860 and the NAZZ was down 10 at 1475.
Breadth was 2/1 negative and
volume was moderate.
There were about 1440 combined
new lows and 15 combined new highs.
The quant computer jockeys remain in control. When
the trend eventually turns these same quants will
push stocks higher the same way they are pushing them lower now.
17 November 2008
This is one tough market and as
we have said before has taken on the look of 1974. In that market stocks moved
lower day after day until they finally bottomed in early December.
The markets are trying to hold important support. For our
own peace of mind we are selling one half of our SPDR Financial position and one half of our CBS position. We also sold for a small profit the GE we bought the other day. These sales will place a comfortable amount of
cash in accounts. While the losses we are taking in the two issues hurt it is
acceptable given current market conditions. The important thing here is to
survive. The next bull market will offer plenty of opportunity as long as we
are still around to participate.
Asian market indexes were
fractionally lower overnight and European bourse indexes are down 1% to 2% at
midday. Oil is weaker as is gold.
In early trading the financials
are under stress and Target is lower on lower earnings and a bleak forecast.
The Financial Times has an
interesting article on the Iceland
We have to leave early today for
our annual physical. At 1pm the major measures were down about 1%. European
bourse indexes closed down about 3%. Gold was lower by a dollar and so was Oil
14 November 2008
Yesterday’s action was a classic
exhibit of a retest of a low. It was too classic for many gurus. This morning
the shorts are back and the major measures are down 3%.
Asian markets were higher
overnight by 2% except India which was lower by 1.5%. European bourse indexes
are up 2% plus at midday attempting to catch up to U.S. markets from yesterday.
Gold is up $22 and Oil is flat.
Treasuries have a bid.
Getting rid of mark to market accounting and
allowing pricing to maturity and reimposing the uptick rule would “save’ the markets. Then the Fed and Treasury
and new administration could deal with the economic crisis in a reasoned manner
instead of reacting to every screwy 3% rise or drop in the major stock
Gold was up $36 to $741. Oil was
down $1.70 at $56.60. Treasuries were flat and European bourse indexes were up
1% and more.
After dropping 300 points in
morning trading the DJIA rallied back to up 75 ten minutes into the final hour.
At 2:30pm programs hit the market and in 2 minutes the DJIA was down 175
points. We like it when programs take stocks up and hate it when they take them
down. The range today was 10%.
At the bell the DJIA was down 340
at 8498. The S&P 500 lost 38 to 873 and the NAZZ
dropped 80 to 1517.
Breadth was 3/1 negative and volume
was 6 billion on the NYSE.
There were about 400 new lows and
10 new highs.
Today was a win for the bears.
13 November 2008
CNBC has Jim Chanos, a well known
short seller, on as its morning guest. Unlike many of the current short sellers
Chanos picks specific companies and makes reasoned bets against them. But, it
is telling of the atmosphere pervading the markets that the guest would be a
short seller. There is an almost perverse complacency that markets are going
lower forever now and we may as well get used to it.
But even in bear markets there
are rallies and today would be a day to expect one. After yesterday we must
admit that we were a bit discouraged as we saw another 7% of the value of our
accounts disappears, not forever but at least for the night. In the last seven
days 20% of value has been eliminated from our accounts.
We take some solace from the fact
that Warren Buffet’s Berkshire Hathaway is also down 30% on the year. In the
last 10 years Berkshire Hathaway is up 60%. Our Model Portfolio is still up
71%. Jack Welch’s GE is down 40%.
Moreover had we stayed all cash
in accounts until last Wednesday, the morning after the election and all the
turmoil of the last three months, and then invested our funds we would still be
down over 20% for the year. It is that kind of market.
But today is a new day and we are
closer to at least a temporary bottom than we were yesterday and so we will
muddle on as we always do with the expectations of reversing the losses over
The selling that is occurring is
more macro than stock specific and so we don’t take it personally. As we have
been saying, this too shall pass.
Intel lowered revenue
expectations last night and Wal-Mart was cautious this morning. Jobless claims
for last week were just announced at 516,000 and so the 500,000 number has been
Asian markets were under pressure
last night with Hong Kong and Japan down 5% while European bourse indexes are
mixed plus or minus 1% at midday. U.S. futures suggest a down opening.
Oil is up a few pennies and Gold
is down $5.
The article at this website on a GM bailout is informative: http://mobile.time.com/detail.jsp?key=262205&rc=to
The last time Intel sold at this level was October of
The one suggestion we heard which seems viable and very
helpful would be to rescind FICA for a year or two. In effect that would give real impetus to Corporations
and individuals by increasing after tax income by over 7% for both. It would
help corporations hire and be specifically aimed at workers.
Stocks opened 1% higher and are now giving back the
gains. On the opening ramp we sold the SPDR Technology and we sold QQQQ by swapping an equal amount of the
QQQQ for the SPDR financials. That raised cash for individual stocks we bought today
on the 300 points drop and test of the October 10 low.
We may be dumb but an 8% yield on GE is too good to pass up and so we bought shares at $14.75. We
sold it at $19.80 a week ago. At that time we sold because we didn’t understand
why GE needed money from the rescue fund after they said they didn’t. We still
don’t but they got it and reaffirmed the dividend thought 2009 and so we are
now willing to accept the risk.
The shorts are at it again today.
What is a marvel to us is that no one mentions the lack of an uptick rule
anymore when trying to understand the selling. This is not 1932 and the selling
will end at some point. We just hope it isn’t 0. Actually we wouldn’t mind 0 as
long as it occurred in one day.
From CNBC: At noon we are down 300 on the DJIA. The Standard & Poor's 500 and
Nasdaq both breached their 2008 lows and the Dow briefly dropped below 8,000,
triggering a sharp selloff across the board on Wall Street that sent the
indexes down more than 3 percent. After a morning of waffling in a tight
trading range, stocks plunged as financial shares declined and consumer
weakness weighed on technology companies. The S&P fell below 839.80,
triggering a wave of technical selling that had traders bracing for the worst.
Indexes moved off their lows for the day but were still down more than 2
percent heading with less than three hours of trading to go.
This intraday collapse is
necessary and hopefully this afternoon we can rally. If not....., it’s more the
same pain we have experienced this week.
Intel announced bad news last night
and remained green or within shouting distance of green even when the DJIA
tanked 300 points at noon. One of the signs of a turn is when bad news doesn’t
kill the stock involved. We repurchased the Intel we sold yesterday below our
sale price. The shares have a 4% yield and last saw the $13 level in 1996.
Gold jumped $15 and Oil reversed
higher after trading at $54 early in the day to close at $59.60 up $3.25.
Treasuries were weaker and European bourse indexes closed mostly small
The DJIA traded in a 1000 point
range today with a move of over 1900 total points up and down and up and down
and up. Given that we traded below the October 10 low today before moving above
it such volatility makes sense. Bulls want to buy the hold and bears wanted to
break the hold but are
now covering for the night only to return tomorrow to try again.
The lack of an uptick rule allows them to do that.
The DJIA gained 550 to close at
8840. The S&P 500 was up 60 to 910 and the NAZZ gained 98 to 1598.
Breadth was 2/1 positive and
volume was 7 billion plus.
There were about 1400 combined
new lows and 10 new highs. That is half the new lows made the last time we made
market lows and is positive as is the volume.
The bulls held at key support. Let us see what
12 November 2008
Sometimes and ugh is just an ugh. Last night at the end of our post we inserted and ugh before our comment that the bears won the day. While we are
confident the stocks we own will reward us over time, we are tired of the
negative action of the markets. That is the reason for the Ugh. The economy is
in trouble but share prices have retreated to the point where the end of the
world as we know it is in the cards.
As an example, this morning Best Buy said that earnings in 2009
will be in the $2 range instead of the $3 range. The shares immediately sold
off 15% to $20. That is 10X reduced expectations. Those reduced expectations
are the result in part of Circuit City
going broke and planning to sell inventory to pay creditors. Those bankruptcy
sales will surely affect Best Buy sales over the next six months but after that
Best Buy will be without a major competitor and should benefit. Surely this
morning’s news is a glass half full not a glass half empty. But this is a take no prisoners market and so the
shares will be pounded today.
One thought we did have last
night was that when we ugh, the markets may be getting ready to stage at least
a slight rally. On that note we present the following form Dick Arms at
Tuesday's semi-holiday, lighter-volume
trading led to what started out to be a dismal session of lower prices and
general apathy amidst fear. But later in the day, it looked as though the
sellers had run out of strength, and the DJIA regained much of its loss,
before giving much of it back again. But the point is that the drop was not
based upon intense selling, it was based upon a lack of aggressive buyers. ... (Tuesday’s action) seems to have been yet
another light-volume pullback, testing the heavy-volume low of Oct. 10. One or
more tests of a major low, over a period of weeks are very typical of a market
reversal. Therefore, the current action is not only to be expected, but is
encouraging. It broadens the base and continues the series of higher lows. The
second chart emphasizes my contention of the very oversold current condition.
Both the five-day and the 10-day moving averages of the Arms Index are at
rarely seen levels. Such readings usually only come in at, or very close to,
important market bottoms. It looks like a time to be buying, not a time to be
Asian markets were lower
overnight and European bourse indexes were higher at midday but are now lower.
Oil is at $58 and Gold is off another $5. Treasuries are
flat. Paulson speaks at 9:30am and so the markets are awaiting that event.
Investors’ Intelligence had 32% bulls and 46% bears last week.
Russian markets are closed until
Thursday to allow the Russian Central Bank to figure things out after the
collapse of the Russian ruble and Oil prices.
We also received a comment on our
phrase this too shall pass. From
“This too shall pass" is a
phrase occurring in a Jewish wisdom folktale involving King Solomon. The phrase
is commonly engraved on silver rings.
Many versions of the folktale
have been recorded by the Israel Folklore Archive at the University of Haifa.
Heda Jason recorded this version told by David Franko from Turkey: “King Solomon once searched for a cure
against depression. He assembled his wise men together. They meditated for a
long time and gave him the following advice: Make yourself a ring and have
thereon engraved the words "This too shall pass". The King carried
out the advice. He had the ring made and wore it constantly. Every time he felt
sad and depressed, he looked at the ring, where on his mood would change and he
would feel cheerful.”
The phrase "This too shall
pass" and the associated ring story were made popular by Abraham Lincoln
in his 'Address before the Wisconsin State Agricultural Society, Milwaukee,
Wisconsin' on September 30, 1859:
“ It is said an Eastern monarch once charged his wise men to invent him a
sentence, to be ever in view, and which should be true and appropriate in all
times and situations. They presented him the words: "And this, too, shall
pass away." How much it expresses! How chastening in the hour of pride!
How consoling in the depths of affliction!”
We sold Symantec and Broadcom
and placed the funds in the top 100 OTC stocks through the QQQQ. That diversifies our risk and allows us to participate in the
upside on Apple and other issues.
The top ten holding are
RESCH IN MOTION
We sold Cisco and bought more SPDR
Financials with the proceeds. We still have enough exposure to the tech
industry and we obviously want to concentrate on financials. The turmoil in
these stocks is presenting a buying opportunity similar to the one in 1990. While the XLF holding is large please note that it is an ETF and is
comprised of 85 different companies.
Over the last five years the SPDR financial ETF is down 50% in price
while the S&P 500 is down 10%.
This year the XLF is down 55% while the S&P 500 is down 40%. When the turn
comes we think XLF will be more volatile to the upside as it has been to the
We are selling Intel, Dell, NVDIA, Micron and Tellabs and placing part of the proceeds in the SPDR Tech which
gives us exposure to a lot of techs and not individual issues. We are keeping
some of the cash in case the rout continues.
Oil was down $4 at $55. We
remember that several years ago we said the markets wouldn’t rally until Oil
moved back under $40. That may soon occur.
Treasuries were better and Gold
lost $22 to $710. European bourse indexes closed down about 3% across the
The DJIA dropped 411 to 8282. The
S&P 500 lost 46 to 852 and the NAZZ was down 82 to 1500.
Breadth was 8/1 negative and
volume was about 6 billion in the NYSE.
There were about 1100 new lows
and 10 new highs.
The bears are in control.
Veterans Day 2008
Markets worldwide are lower today
with Asian markets losing 4% plus and European bourse indexes all 2% and more
lower at midday. Oil is off $3 at $59 and Gold is down $18. Treasuries are
Since last we wrote the markets
were up on Friday and down yesterday. Our concentration in financials and tech
and retail is hurting near term performance. The stocks we own are good values
at the levels at which they are trading. We don’t like losing money and we take
small comfort that we are down only half the market losses of this year. But
investing is about making money over the long term and we do believe that what
we own will do that for us.
We have traded out of lesser quality stocks while we
were traveling and today and improved quality by moving into the SPDR
Financials and adding to other holdings. We have reduced our retail exposure to
four stocks that will all survive and thrive when the recession ends: J Crew,
Whole Foods, Starbucks and American Eagle Outfitters. All
have low debt and are in excellent financial shape. JCG is off 75% from its 12
month high and 40% below its offering price three years ago. WFMI is down 80%
from its high a few years ago and 75% from its 12 month high. Starbucks is down
75% from its three year high and 50% from its twelve month high. The same goes
for American Eagle Outfitters.
Our tech holdings are of the highest quality and priced
at half or less of yearly and five year highs. CSCO ( $4 per share in
cash and sells at at 12 X earnings, Intel with
$2 per share in cash and at 10X, DELL with $3 net in cash at
8X. BRCM, SYMC, NVDA ($2.50 cash per share), and VECO
are all at multi year lows with better than recent quarterly sales and
Evergreen Solar (ESLR) is a speculation on solar energy taking off. It is priced at
20% of its yearly high.
We are concentrating on financials by owning the SPDR
Financial ETF which is comprised of money center banks and insurance
companies that have been guaranteed survival by the Fed and Treasury. The XLF
is down 60% from its twelve month high and yielding 4%.
CBS is down 75% in price
over the last twelve months as is The New York Times. Both have 6% plus
Motorola with $3 in cash and
priced at $4.50 and Tellabs $3.50 in cash and priced at $3.80 and both
are at one third or less of revenues. We have been trading Micron
successfully and will either hold or trade as conditions suggest.
Now it is a matter of time and patience.
Russia's ruble fell
the most in two months and stocks tumbled after the central bank indicated it
may scale back its defense of the currency as officials grapple with the worst
financial crisis since the 1998 devaluation. The
ruble slumped 1
percent against a basket of dollars and euros after central bank chairman
Sergey Ignatiev said the currency has a "tendency toward weakening,"' during a televised press
conference yesterday. Russia's
Micex Index plunged
10 percent, the biggest decline worldwide today.
European bourse indexes caught up
with Asian indexes at the close with the DAX down 5% the CAC down 4% and London
Las Vegas Sands has an
offering of 180 million shares at $5.50 per share last night. One year ago the
shares were selling at $112.
Gold ended down $12 at $734. Oil
dropped $3.68 to $58.80. Treasuries were flat.
Part of the selling today is
related to a formerly $10 billion hedge fund that has lost 75% of its value
this year after being up 100% in 2003 and 2007. Supposedly the selling of that
fund is over but how many more to come remains the $1 trillion question.
This too shall pass.
The DJIA lost 180 to close at
8690. The S&P 500 dropped 20 to 898 and the NAZZ gave up 35 to 1580.
Breadth was 4/1 negative and
volume was active at 4.5 billion on the NYSE.
There were 685 new lows and 15
Ugh. The bears won again.
5 November 2008
We will be
traveling until next Tuesday.
Asian markets were mixed
overnight with China and Japan up 3% and India down 3%. European bourse indexes
are down about 1% to 2% giving back some of yesterday’s gains and U.S. stocks
are going to open lower after the pump yesterday. Gold is down $5 and Oil is
off $2 at $65. Treasuries are flat.
Obama delivered a great speech
last night and McCain did him one better by delivering the best speech we have
heard from him. If he had taken that tone throughout the election he may have
Obama owes Michigan and Ohio and
so we think there is going to be a rescue package for Ford and GM. The auto
industry affects over 3 million jobs and so any real disruption would compound
the problems of the economy. The mistakes made by the auto makers were dumb but
honest as opposed to the greed induced dishonest decisions the financial system
has imposed on the economy. It is cheaper to give the auto companies $100
billion that to retrain and find jobs for 1 million folks. The government
should take a 50% equity stake through warrants in the companies when it lends
While GM is cheaper on an absolute we don’t understand
the Chrysler mating dance and so we bought a bit of Ford in accounts as speculation.
Las Vegas Sands, the gambling company, flopped from $142 a year ago
to $4 last week and is now trading a $12. Now that is volatility.
After the 20% run up in stocks
over the past few weeks a pause is to be expected. We do note a tome of
conciliation and good will in the talking heads this morning and
so we are hoping, but not predicting a few days, weeks, and months (?) of
equanimity towards President-elect Obama as he forms his cabinet. That
mellowing effect should help the psychological part of the markets.
Unfortunately the earnings part of the markets is going to remain punk and
retailers’ numbers which will begin to be reported are going to be horrid. We
will soon find out how much of the horrid is priced into the stocks.
We spoke too soon, the talking
heads on CNBC on the nine screen setup are all wailing that Obama hasn’t done
anything yet and that is why the markets are down today. There is no thought to
the fact that a 20% up move needs some pullback to settle the ground.
Yahoo popped a bit on takeover rumors and we switched to Barnes & Noble with the money. We
sold Micron for a 25% gain.
Gold lost $15 to $740 and Oil
reversed lower and dropped $5 to $64.50. Treasuries were firmer and European
bourse indexes lost half of yesterday’s gains to close 3% lower.
Cisco beat on sales and earnings
after the close.
The DJIA closed down 486 at 9140.
The S&P 500 dropped 52 to 952 and the NAZZ lost 100 to 1680.
Breadth was 4/1 negative and was
active at 5 billion shares on the NYSE but only 2 billion on the NAZZ.
There were 145 new lows and 7 new
The bears won the day and
Obama won the election.
Election Day 2008
How sweet that
Fast Eddie Vrdoylak pleaded guilty on the eve of Obama winning the Presidency.
Mike Ryoko is smiling.
BENTON, Ill. (AP) -- A rooster
played chicken in the wrong town. That's the word from the downstate community
of Benton, where police took a rooster into custody after it allegedly
confronted a woman and her child. Police Chief Mike O'Neill said the rooster
has been bothering people lately, trying to keep them from getting where they
want to go. O'Neill said officers had enough on Monday and took the rooster
into custody after what he described as a brief scuffle. Nobody was injured and
the rooster was thrown in an enclosed area near the police department. There,
it lived on chicken feed and water until police located the owner. Chickens
aren't allowed to live in Benton and the rooster was turned over to the owner
only after he promised to find it a new home in the country.
Asian markets were higher
overnight with Japan up 6%. Japan is now 30% higher than its 26 year low made
just last week. Timing is sometimes everything. European bourse indexes are 1%
to 3% higher at midday and U.S. futures are suggesting a higher opening. Gold
is up $7 and Oil is $1 higher.
The Australian Central Bank cut
their key lending rate by .75% which was much more than expected.
A story of the times we live in
from the WSJ:
Billionaire investor Carl Icahn reported Monday that his affiliates
sold 8.5 million shares of Lear Corp.'s stock at $1.90 a share, slashing
his stake in the auto-parts maker to 4.95% from nearly 16%. According to a
filing Monday with the Securities and Exchange Commission, Mr. Icahn's
representative on Lear's board, Vincent Intrieri, also resigned from the board.
In his resignation letter, which was disclosed in the SEC filing, Mr.
Intrieri said his departure wasn't because of any disagreement with the
company, though he expressed regret that a buyout transaction that was proposed
by Mr. Icahn last year wasn't approved by Lear's shareholders.
Lear shareholders rejected a
sweetened $2.9 billion buyout offer valued at $37.25 a share from Mr. Icahn after rejecting an earlier bid of $2.8
billion, or $36 a share. The bid was supported by Lear's top executive but
criticized by some shareholders who said the company was worth more than Mr.
Icahn was offering.
Mr. Intrieri said Mr. Icahn's funds are reducing their positions in
Lear in order to realize capital losses before the end of the year. He said these
capital losses will offset certain capital gains realized by the funds.
After the sale, Mr. Icahn beneficially owns about 3.83 million Lear
shares, according to the filing.
On Monday, Mr. Icahn also delivered a letter to Lear's board,
expressing his "great respect" for Lear Chairman and Chief Executive
Robert Rossiter and Executive Vice President Daniel Ninivaggi.
Mr. Icahn said he finds them to be "extremely competent"
executives and he hopes to keep up his relationship with them in the coming
With his stake now under 5%, Mr. Icahn is no longer required by law to
file share-sale announcements with the SEC.
Lear shares rose 14 cents, or
7.2%, to $2.09 at 4 p.m. in
composite trading on the New York Stock Exchange.
The WSJ has a story this morning about the Treasury
considering investing funds in GE as
they have with banks. We don’t understand why GE would need any investments
after Buffet’s $3 billion buy. We are
selling GE and will placing half the funds in the SPDR Financial ETF (XLF).
We will invest the remainder of the funds in the XLF on any pullback. Both GE
and XLF are down 40% this year and we think that if GE makes it to $40 so will
the XLF for a better percentage gain and more diversification.
We are adding Veeco
and Talbots to accounts. The Talbots
has been and is an anchovy.
European bourse indexes closed 4%
to 6% higher.
Gold gained $40 to $766 and Oil
jumped $6 to $70 and change. Treasuries were a tad weaker.
The DJIA closed up 300 points at
9622. The S&P 500 gained 40 to 1005 resistance. The NAZZ jumped 53 to 1780.
Breadth was 3/1 positive on the
NYSE and 5/4 to the good on the NAZZ and volume was moderate.
There were 135 new lows and 20
The bulls and Obama won the day.
3 November 2008
Asian markets were higher
overnight and European bourse indexes are fractionally higher at midday as a
new month is welcomed on ‘Wall Street. With October behind us and the markets
up on Friday there is a calmer tone in the media maven mutterings this morning.
Today and tomorrow may be quiet
as the traders await the election results. Most folks seem to think Obama will
win and so we would surmise but not bet the ranch on the thought that Obama’s
win is in the markets.
Gold is up $20 in early trading
and oil is down another $2. Middle Eastern stock markets are taking it on the
chin as oil prices drop. And Dubai with its bubble building boom is in the
sights of the abandon ship hedge
funds. As noted in our comments month ago, Dubai was an accident waiting to
The FDIC took over a bank in
Florida and gave the deposits to Fifth
Third. The logical extrapolation is that Fifth Third is going to be a
survivor of the bank mess since the FDIC is giving them the deposits. We are buying shares of Fifth Third in accounts.
Hopefully our logic prevails.
General Motors auto sales were down 47% in October versus last
year. Ford was down 30% and Toyota was down 27%. Ouch.
We bought Veeco,
which is a tech instrument company that we used to trade when it was in the
$20s. We bought at $8.50. We also began a holding in Old Second Bank Corp., which is a small Aurora Illinois bank
selling below book. We will be adding shares over the next days. And we began
positions in Molex and Garmin and Barnes & Noble and Barnes
Group with the idea of adding shares accounts over the next few weeks.
Barnes Group, Inc. manufactures and distributes aerospace and
industrial products worldwide. It operates in three segments: Barnes Aerospace,
Barnes Distribution, and Barnes Industrial. Barnes Aerospace segment produces
precision-machined and fabricated components and assemblies for original
equipment manufacturer turbine engine, airframe, and industrial gas turbine
builders worldwide, and the military. It also provides jet engine component
overhaul and repair services for various turbine engine manufacturers,
commercial airlines, and the military. In addition, this segment also supplies
designated aftermarket parts for the life of the related aircraft engine
program. Barnes Distribution segment distributes maintenance, repair,
operating, and production supplies, as well as provides inventory management
and logistic services. It also offers replacement parts and other products,
including fasteners, electrical supplies, hydraulic components, chemicals, and
security products to small repair shops, railroads, utilities, food processors,
chemical producers, and vehicle fleet operators. Barnes Industrial segment
manufactures high-precision punched and fine-blanked components used in
transportation and industrial applications; nitrogen gas springs and manifold
systems used to precisely control stamping presses; retention rings that
position parts on a shaft or other axis; reed valves, which are
custom-engineered components used in compressors; and injection-molded
plastic-on-metal and metal-in-plastic components and assemblies used in
electronics, medical devices, and consumer products. It also distributes die
springs and nitrogen gas springs, and mechanical struts and standard parts,
such as coil and flat springs. In addition, this segment provides engineering
solutions, including product design and development, product and material
testing, and rapid prototyping. The company was founded in 1857 and is
headquartered in Bristol, Connecticut.
Garmin, Ltd. and its subsidiaries design, develop, manufacture, and
market global positioning system (GPS)-enabled products and other related
navigation, communications, and information products worldwide. It operates in
four segments: Automotive/Mobile, Outdoor/Fitness, Marine, and Aviation. The
Automotive/Mobile segment offers a range of automotive navigation products, as
well as various products and applications designed for the mobile GPS market.
The Outdoor/Fitness segment provides GPS-enabled handheld products for outdoor
activities and training assistants for athletic pursuits. The Marine segment
includes network products and multifunction displays, fixed-mount
GPS/chartplotter products, instruments, radars, autopilots, and sounder products.
The Aviation segment comprises panel-mounted product line, which includes
GPS-enabled navigation, VHF communications transmitters/receivers, multi
function displays, receivers, instrument landing system receivers, marker
beacon receivers, and audio panels, as well as digital transponders that
transmit an aircraft’s altitude and its flight identification number in
response to requests transmitted by ground-based air traffic control radar
systems or collision avoidance devices on other aircraft. Garmin’s consumer
products are sold through independent dealers and distributors, and panel-mount
aviation products are sold through distributors worldwide. The company was
founded in 1990 and is based in Camana Bay, Cayman Islands with additional
offices in Olathe, Kansas; Southampton, the United Kingdom; and Shijr, Taiwan.
Molex Incorporated manufactures and sells electronic components
worldwide. It offers micro-miniature connectors, SIM card sockets, keypads,
electromechanical subassemblies, and internal antennas and subsystems for
telecommunications market; and power, optical, and signal connectors and cables
for end-to-end data transfer, linking disk drives, controllers, servers,
switches, and storage enclosures for data products market. The company also
provides interconnects used in air bag and seatbelts, tire pressure monitoring
systems and powertrain, and window and temperature controls; and designs and
manufactures connectors for home and portable audio, digital still and video
cameras, DVD players, and recorders, as well as devices that combine multiple
functions for automotive market. In addition, Molex manufactures cables,
backplanes, power connectors, and integrated products that are found in various
products, such as electronic weighing stations, and industrial microscopes and
vision systems, as well as provides connectors and custom integrated systems
for diagnostic and therapeutic equipment used in hospitals, including x-ray,
magnetic resonance imaging, and dialysis machines. Further, it provides manufacturing
services to integrate specific components into a customer’s
product. The company sells its products to original equipment manufacturers,
contract manufacturers, and distributors. Molex was founded in 1938 and is
based in Lisle, Illinois.
Veeco Instruments, Inc., together with its subsidiaries, designs,
manufactures, markets, and services a line of equipment primarily used by
manufacturers in the data storage, high brightness light emitting diode, solar,
wireless, and semiconductor industries. The company operates in two segments
Process Equipment and Metrology. The Process Equipment segment produces and
sells various process equipment products, such as ion beam deposition systems
to deposit precise layers of thin films; ion beam etch systems for use in the
fabrication of discrete and integrated microelectronic devices; and physical
vapor deposition systems, which offers a deposition platform for developing
next-generation data storage and compound semiconductor applications. It also
offers diamond-like carbon deposition systems that deposit protective coatings
on advanced thin film magnetic heads; precision lapping, slicing, and dicing
systems for use in back-end applications in a data storage fab; metal organic
chemical vapor deposition systems for use in signage, mobile device
backlighting, and specialty illumination; and molecular beam epitaxy systems
for depositing epitaxially aligned atomically thin crystal layers, or epilayers
in an ultra-high vacuum environment. The Metrology segment provides atomic
force/scanning probe microscopes for data storage, semiconductor, research, and
other industrial applications; stylus profilers to produce cross-sectional
representations and/or quantitative measurements; and optical/stylus metrology
products to make non-contact surface measurements. The segment also offers
versatile tools for use by research and development centers and universities.
The company sells its products through its sales and service organizations in
the United States, Europe, Japan, and the Asia Pacific. Veeco Instruments, Inc.
was founded in 1945 and is headquartered in Woodbury, New York.
Oil lost $3.30 to $64.50.
Treasuries were flat and Gold gained $4 to $72. European bourse indexes closed higher.
The DJIA lost 5 to 9320, The
S&P 500 was down 3 to 966 and the NAZZ gained 5 to 1726.
Breadth was 5/4 positive and
volume was moderate.
There were 125 new lows and 25
Today was a sleeper.
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