Lemley Yarling Management Co
309 W Johnson St
Madison, WI 53703
Comments on activity in client accounts
27 October 2023
Our portfolios were holding their own till Friday when the big boys and girls decided to concentrate on the Super Seven and sell everything else. With the Dow down too may days is a row a relief rally should be in the cards, he said Hopefully.
Too much bad stuff happened this week in the real world to worry about stocks.
The massacre of innocent Israelis by Hamas has been followed by the massacre of innocent Palestinians by the IDF. The IDF bombed the haystack target that is Gaza hoping to hit a few pins as the war that has been going on for 75 years (worth the read https://cpnn-world.org/new/?p=16396 ) resumed with no positive result possible.
The massacre of the innocent folks in Maine is on the bloody hands of the NRA, The Supremes and the Repubs who keep spouting their Originalist nonsense when refusing to outlaw the military weapons that white yahoos open carry throughout America. If 50 black folks walked up to any Capitol in any state with the ordinance that the white Nazis carry, we doubt the response would be peaceable. When the Founders approved the Constitution the most ‘lethal arms' were single shot muzzle loading unrifled guns.
And in the real unreal world, The U. S. House of Representatives -well the Repubs- elected a Speaker named Johnson from Louisiana- 2 heart attacks from the presidency. He is an 18th century thinker who would have been popular with the leaders of the Inquisition.
And in that same zoo, many in Congress are proclaiming that they want to stop funding Ukraine in its war for its sovereignty which could preserve the Western alliance and NATO. The ghosts of Robert Taft, Fr. Coughlin and Lindberg are dancing in their graves with glee. Trumpsters who hated Jewish folk last week are now all in for war and killing Muslims (which they never were against).
And need we mention that with wreck all Republicans following their dear leader The Trumpster's admonition (if he or they knew the meaning of the word), it is probable a Government shutdown is coming soon.
As is obvious, we are in a funk and so we will end with the poem by Adam Hanft that we always print when war and death pervade the news.
a poem by Adam Hanft
It is always the same way,
that after the armies have
settled into their homes and
the borders are shifted their
one lame mile
that talking rises that they
have found the little girl.
It is so, they have found her in a
tongue-tied corner of the woods,
and they have learned from
the palsied woman who lives with
her son by the bridge how in a
tantrum of strength she rose
to the window and saw
when the soldiers came they
killed the Mayor's little girl.
And so it starts, how the child
was gathering sunshine in her
rainbow creased dress when she
in another town, by another bridge
the girl was sleeping in the grass
when they came and that her
smile stuck to her lips while the sky
clanged and beat around her.
And now all the schoolchildren, so
scrubbed and solemn in rows are
standing as the Mayor, with
his one good arm,
drapes a few flowers on the brick and
wooded monument that stands next to
the bridge and a
Hundred years from the window of the
old woman who first saw the
glinting helmets and heard the
halfhearted scream roll
into the grass.
20 October 2023
Both bonds and stocks remained under pressure this week. The mid-October rally was short lived. The failure to elect a Speaker, the Israel/Palestine conflict, Ukraine and the looming shut down are certainly not conducive to a market rally. Mortgage rates over 8 % must affect housing cash yielding 5% there is no rush to commit totally to any investment.
We have continued trading around earnings announcements and were happy on Tuesday/Wednesday when accounts gained over 2%. Unfortunately, MR. Market took those increases away on Thursday/Friday.
We continue to hold most of the issues mentioned on the 13th and plan on maintaining/adding to most of our holdings into year end.
Our bank holdings yield 6% and are 50% lower than they were last January. Verizon & Walgreens are both 7X and yield 8%. Our Retail holdings average 6% and the Cash 5% (USFR Wisdom Tree. Disney at $85 and Target at $110 (5%) are both down from $180 in the last year. Maybe they were overpriced but they certainly have retrenched enough to be worth holding. 3M yields 6% and has settled most of its plastic and ear-muff problems and also has dropped from $133 to $85 while being priced at 10X earnings for the first time in memory. Pfizer, down from $60 in the Covid period to $30 with a 5% yield is certainly worth the price. GM and Ford (5%) are not going anywhere till the strikes are settled. We added to Southwest Air on a 9 year low at $24, yielding 3% with more cash (over $20 per share) than debt. We also repurchased JETS ETF which owns 10% each of the major airlines and 3% each of all the rest and is priced at its all-time low.
13 (Friday) October 2023
Markets were firmer this week as earnings season began on Friday with several major banks reporting better than. Citi and BankAmerica opened higher but closed lower on the day while JP Morgan held a gain even though CEO Janie Dimon sounded the gloom and doom alarm. The major stock market gurus are death on banks and retail and so, of course, we have been adding them to accounts for next year gains.
For the last week we have been purchasing measured amounts of individual stocks trading on yearly and multi-year lows. We have also traded out of some issues for profits and then repurchased when those stocks held their gains.
We currently own; Autos (GM, Ford), Food (Campbell, Hormel, Hain Celestial), Drug/Medical (Pfizer, Medtronic), Banks (Citi, US Bank, BankAmerica, Fifth Third Bank, Key Bank, Huntington Bank), Retail (Tapestry, Foot Locker, Kohl's, VF Corp, Nordstrom, The Gap, Macy's and Under Armour), Airlines (Southwest).
We have added several out of favor Fancy Stocks: (Target, Nike, Starbucks, Zoom and DocuSign). We own Dow stocks: (3M, Walgreen's (new CEO) and Verizon). AT&T and Newell complete our holdings as of Friday night. We hope to repurchase Disney which we have been trading profitably even though it has been under selling pressure all year.
Only in America:
The biggest windfall is headed straight to Taylor Swift, who stands to make as much as $4.1 billion from the Eras Tour, according to estimates from Peter Cohan, an associate professor of management at Babson College. That's if the pop star ends up keeping the standard artist's share of roughly 85 percent of her tour's revenue, with average ticket prices of $456. Swift's earnings would be the most from a single tour for any musical act to date — and more than the yearly economic output of 42 countries, including Liberia, which has more than 5 million people.
But the impact of the Eras Tour extends far beyond what Swift takes home. In one of the few efforts to assess spending by concertgoers, software company QuestionPro quizzed 592 Swifties who responded to an opt-in online survey. Based on their answers and average concert attendance, the company estimates that Swift's fans spent about $93 million per show — yes, on tickets, but also on merchandise, travel, hotels, food and outfits.
6 October 2023
Good news is bad news while Rome burns (Congress fiddling).
The U.S. economy adds 336,000 jobs last month The estimate was for 120,000 jobs added. Bond yields rose with the 30 yr. over 5%.
In the last 3 years Treasury bonds with maturities of 10 years or more have plummeted 40%.
Stocks have been lower for three weeks straight but after a downward reaction to the good (for workers) Employment news this morning the major measures reversed to close 1% higher on the day.
When the markets have had a strong first half and then pull back in September as has occurred this year they usually turn up around this time in October and rally into at least early November.
We have been committing funds in small amounts to a variety of value stocks on their lows for the year.
We currently own: GM, Ford, Pfizer, USBank, Truist, Citi, BankAmerica, Key, Huntington, Southwest Air, United Natural Foods, Hain Celestial, Newell, Kohl's, VF Corp, Nordstrom, Macy's, The Gap and Under Armour. We've added a few we've usually don't own because they seem to be attractive holds or at least over year end trades. These are Target, Nike, Starbucks, 3M, Disney, Medtronic and Raytheon.
We are also tiptoeing back into Verizon and AT&T.
This is a fun- and sometimes scary time of the year.
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