The Insider Report

The last couple of days for us have been very frustating.  We were perfectly positioned going into the President’s Day weekend and suffered almost no losses on Tuesday.  I wish we could say we have been that fortunate since.  There has been nonsensical selling.  Alternative energy stocks, such as AMSC go down when oil skyrockets and even natural gas stocks go up?  NLC with 1/3rd of it’s business in the oil sector goes down while oil service stocks go up?   In headline driven markets, technical analysis becomes less useful.  When you lose your compass slow down until you get your bearings.

You can always find some fundamental reasons for diverging opinions, but I look at charts for the objective one. In this case despite the pessimism of the news and US budget deficits, the dollar appears to be bottoming out.

We are now heavy into gold stocks, ETF, and USO. The situation in Egypt going into a long weekend and the end of the month will make hedge funds nervous. Expect a very weak close. Hedge as much as you dare.

Everyone is fixated on finding the next Apple, but look at this stodgy department store, Dillard’s. The stock rose twenty fold in twenty three months.  Too bad I didn’t buy it. It’s been on my screen since $2.75.

True Religion Apparel is technically poised for a bounce. Anecdotal checks of inventory show little discounting which leads me to believe that XMAS season went well. The high-end consumer seems to have fared better than the lower-end demographics. Catalyst. The company will be presenting Wed at the Annual ICRX Change conference after the market closes on Wed. Could be a good bounce or more importantly a run-up into the conference in anticipation.

Our largest position is Visa which is 16.41%.  This is an out-sized position and we will be reducing it soon one way or the other.  We all know who Visa is and we think it is pretty clear that cash transactions are on the way to becoming extinct and Visa is the prime beneficiary of this secular trend.   The reason though that we own Visa is that it recently dropped in price from 80 to 67- almost 16% in one sad day in December for Visa shareholders when Uncle Ben Bernanke announced that the Fed Reserve was suggesting that the … Read more

Classic case of massive insider buying, doubting and mounting short position, legal wrangling with huge implications.   We loaded with  call options limiting our losses but taking the full upside for at least a while.  Apparently no one really knows the future earning potential of this company as well as the people running it who see to be wanting to own more stock in it.  Duh.  I’m a buyer and it seems they are able to split the good risk from the bad risks, incredulously. It just seem that if you have lots of money and friends in high places things work … Read more

This is truly a disruptive company.  What I mean by that is that this Company, SODA, has the potential to destroy CocaCola and Pepsi’s business model.  I know that is a strong statment and I don’t own a lot of this stock yet but I am a big user of their product and I haven’t brought home a six pack or case of Coke or Pepsi in a month.  Trust me, I know my soda.  This is the best business model (low tech little risk of technological obsolescence, low capital investment) that I have ever seen.  The only risk is … Read more

Dell is cheap, insider buying, and the rumored possibility Michael Dell may take the company private although that makes no sense to me unless he is just fed up answering investor questions.    I think Dell is a cash cow and you can make more money with Dell over the next six months than Apple.  I personally run Windows on Apple computers and will not buy a Dell but if I had to buy a computer for an employee,much less 20,000 computers, I’d reconsider that.  What you like and what you can make money with are often two very different things.

This is a trade we are watching closely.  We are also long BAC.  There is nothing we can add to the story, it’s too well documented.  There is a lot of insider buying at prices a little up for here and the news has been so bad, anything short of bad news could move this behemoth.  Slowly, though, this is like moving a battleship.

Muni bonds in the last three weeks have fallen out of bed. Normally I disdain these investments but we are nibbling at multiple Invesco Van Kampen funds yielding an amazing 8%. Symbols include VMO,VGM, VIM, VKI, and VCV. We expect to not only pick up the units dividend on 12-12, we expect to make some short term capital gains from these very depressed levels.  The long bond has fallen dramatically on prospects of economic improvement.  This may be the correct interpretation but we think the muni market has taken a disproportionate hit.  It’s of course not immune from rising rates but … Read more

They looked oversold and we have been nibling at them making a little money, losing a little money. Yesterday as soon as the WSJ broke a story about the Fed allowing them to start offering dividends again, we jumped in with both feet. We especailly hit Bank of America hard on the option front loading up on the Jan 12.5 calls. They are up 40% today and we blasted away at JPM but have already closed the position out for a quick profit. We still hold AF and some BBT as there has been some insider buying at higher prices … Read more