Bud's Poem Page

Halloween 2001
No treats yesterday, only tricks as the markets opened down and stayed down all day. We added some Sun Microsystems to larger accounts and would add more if SUNW drops to $8.50 per share. We bought a little Cisco (CSCO) in trading accounts, Bought a bunch more Tellabs at $13.75 for larger accounts, and bought SBC in those accounts where we sold Bellsouth last week. Because the market is now down 400 points in two days we think we are going to get a sellable rally soon. Mutual Fund tax year end is tomorrow. How appropriate it's Halloween. We will keep hoping for some treats in the form of a rally in a few of our stocks. We saw today that General Motors Acceptance Corp sold some 15 year maturity bonds at a 7.50% yield. Sounds good since we are only getting 2.25% on our cash. But 15 year bonds will drop15% in value on a 1% interest rate move higher. Be careful and don't chase yield. We are staying in cash.
30 October 2001
Oops! No rally yesterday, but kept the Tellabs, (TLAB), purchased at $15.35 per share, and also purchased EMC, (EMC) , at $13.27. These were purchased in our account and a few trading accounts. All other accounts had no activity and we don't expect to be doing anything much until a week or two from now. Since we plan on posting more than once a day when conditions warrant, don't forget to hit your refresh button. We also have posted the Model Portfolio as it looked on 10/26/2001. So if it's not on your Model site refresh that page. Expect sell off to continue this AM and then would expect a rally thru Halloween. Time for the big guys to try and "mark up" their portfolios for month end.
29 October 2001
The markets opened lower today , we would use the opportunity if we were in a trading mood to buy Tellabs for a several point up move over the next few days. We are doing so after this post in aggressive accounts.
29 October 2001
We purchased Lucent at under $7 and Palm at $2.50 per share on Friday for most accounts in small amounts. Both are down stupendously from their two year highs. We know we planned to keep our powder dry but we used funds from our Broadwing reduction last week. We have absolutely no idea what is going to happen today or this week so we will probably be spectators for today.
27 & 28 October 2001
The wind has died and the weather has freshened with bright sun and cool temperatures. Time to get outside and chop wood and move hay. In reviewing the accounts Saturday morning we were pleased with our positions. We currently own Broadwing, EMC, Lucent, Palm, SunMicrosystems, and Tellabs in most accounts with some Barnes&Noble.com in a few accounts. Yet we are no more than 20% invested in stocks in larger accounts and less than 50% invested in most small accounts. Well positioned for rally or pullback.
26 October 2001
The markets had a strong reversal day yesterday which means that today should be an up day also. Maybe the mutual fund tax selling is over for the year. We remain wary and are comfortable with our cash. This "war" is not like 1990.
25 October 2001
We raised cash today by selling AT&T Wireless (AWE) for no gain, but it was up 20% in two days. Since we've been wanting to get back to mostly cash we used this opportunity. We also sold some of the Broadwing (BRW) we bought last week to get our position back to a more realistic level in accounts. Sometimes when stocks we like drop on so-so news we get carried away by wanting to prove we are right. We buy too much as if we by ourselves can staunch the downswing. We like BRW but we think we will have a chance to buy more lower -unfortunately. Finally, we also traded out of the EMC we bought two days ago for a ten percent profit.

One commentator we respect remarked today that the markets would be a lot higher if the anthrax scare weren't out there. WE agree. The markets would also be higher if September 11 hadn't occurred. But it did occur and we think the markets and investors haven't processed the implications. We know we haven''t. Until we do we will be risk averse and quicker than usual on the trigger. Investing and living are no longer a game. At least for now.
24 October 2001
The stock market meandered yesterday with no real trend evident. The markets are back to their pre-September 11 pattern of a seemingly strong up day with no follow through the next. When Goldman Sachs and Merril Lynch turn on a big cap like SBC and cause a two day 12% drop, we take notice. Keep your powder dry today.
23 October 2001
We view the rally yesterday as temporary. We won't be adding to positions, and will trade out of the few that we have if any of them have big up moves.
22 October 2001
With no bad news from the war front, and the anthrax news assuming the media overkill of the Condit-Levy affair, the markets will probably start concentrating on earnings and the hoped for fiscal stimulus. We are now 20% to 30% in stocks in many accounts, FOR A RALLY ONLY, and our views are subject to change without notice.
Current Thoughts
The factual statements herein have been taken from sources we believe to be reliable but such statements are made without any representation as to accuracy or completeness or otherwise. From time to time the Lemley Letter, or one or more of its officers or employees, may buy and sell as agent the securities referred to herein or options relating thereto, and may have a long or short position in such securities or options. This report should not be construed as a solicitation or offer of the purchase or sale of securities. Prices shown are approximate. Past performance is no indication of future performance.