Summary:
A nice pop of Friday put me up 2% for the week. AHR rose on good earnings and a divy increase. QADMF also rose on earnings though later fell after reporting it had sold more stock. Encouragingly, agency mortgage REITs (AHN, CMO, NLY, and MFA) seems finally to be gaining momentum. I’m exposed to all either through stock or options. XSI reported a revenue surge on Thursday but earnings were not over the top and the stock tanked, though recovered some on Friday
Before Friday it was more grinding and churning. The low volatility slog has sapped much of my excitement for the market, though perhaps this is a good thing as I have other things to get done and greater time involvement doesn’t necessarily mean efficient time involvement. I regret not having more cash on hand during the March meltdown. With so much tied up in ALSWF, China and junior miners, I missed scooping up some real bargains in sectors such as dry bulkers. I’m thinking of reducing my ALSWF exposure, but will wait for it to jump a bit. I’m currently at about 25%. Lowering this to 15-20% after a run up would give me more cash for when other opportunities come.
One opportunity which I caught only the tail end of is RICK, a strip-club chain which was recommended heavily by a poster. They are buying up clubs around the country, kind of like McDonald’s and Starbuck’s did in their industries, and also have an online business. Though I haven’t seen their product (unfortunately no locations in my area), their numbers are pretty sexy. They are forecasting earnings of $1.25-1.30 for FY2008 and $2.30-2.50 for FY2009. At a $24+ share price, that’s a good value. I only bought a little, both because it ran up on me and I’m cash constrained. Hopefully it will pull back a little and I will be able to add more.
Beside the RICK purchase, I closed out MMG (tired of waiting for a company which won’t earn money for a while), sold short some LEN, and trimmed some ANH. While this week’s move was encouraging, I wanted to raise some cash.
Friday was encouraging and earnings reports for my portfolio companies have generally been good. Impatience is perhaps giving way to cautious optimism, but remains fragile.
Positions:
Long: ACY AHR ALSWF ANH CHNG EPMWF GA GREXF MDNNF MEAOF MLKKF NLY NRF QADMF RICK SGTI SNEN XSI.
Short: GCI KBH MEG MNI TOL.
Options Long:
Calls Short: NRF Jun 12.5.
Puts Short: ANH Jul 10; CMO Jun 12.5, Aug 12.5; MFA Jul 10; NLY Jul 20, Oct 17.5; NRF Jun 7.5, Oct 7.5.
Cash: 6.1%
Short Pct: 11.9%
Read:
Stocks Researched:
Positions most worried about: ACY – repair costs, airline customer woes.
Positions most sanguine about:
Biggest market worries: not feeling worried even though there’s probably more unexpected financial writedowns out there.
Thinking about: adding agency mortgage REITs
Outlook ( up-flat-down surety rating: 1-5 reasoning):
US: flat-down, 2.0; still not out of the soup.
Tech: ??
China: up, 3.0; strong economy and has fallen alot.
Silver: flat s/t, 2.0, price action; l/t up, 1.0, industrial demand, but price rises.
Gold: who knows? has risen alot.
Copper: flat-up, 2.0. China demand.
Zinc: flat, 2.0. Stocks stabilizing.
Real life: fairly productive week but need to do more.
Weekly sleep and exercise: biking and soccer on Sunday. Sleep decent.
Mood: good
