I visited the master this weekend. He had made 15% on his total portfolio last year. Not bad considering he keeps so much in cash. He had few new ideas - something about Hennessey 30 got his attention. But he is still bullish on gold and oil, like Baron's keeps reminding us. While visiting his retirement villa I had a chance to browse through the Baron's lying around. Ah-ha! They also like Mickey-dees and Sherwin-Williams. I feel somewhat vindicated. Picked up a couple more tips while there. Time to revisit Goldman Sachs and Skechers. Don't take my word for it. Also maybe Fidelity Leveraged Stock due for a fall. Housing market substantially leveraged, is that it? Ah well, maybe I can lighten up a bit. See you next time.
Regards, Big Al
Sunday, February 25, 2007
Saturday, February 17, 2007
Ice storm
New Jersey/Philadelphia had a freakish ice storm this week. A sheet of ice still encases the leaves on the rhododendron out front, and all of the sidewalks are impassable sheets of ice. The local lake is frozen over for the first time in years. Our yard is littered with shards of ice broken off from the trees above. Winter has finally arrived!
As to Big Al's Casino this week, the bulls keep charging along. The Dow Jones has climbed into record high territory, 12767 for the week. NASDAQ on the other hand is at 2496, at 50% of it's all time high in March 2000, but still moving upward for the year. Housing prices are coming down. Companies involved in subprime loans (loans to risky customers) are experiencing large losses. This gives me pause - if homeowners are defaulting on mortgages, doesn't that create additional pressure on the credit markets? More defaults means less money means less credit, meaning less spending? Less spending means slower growth in consumer goods at least, or big ticket items. At the very least isn't it possible that investors who are overly leveraged (in debt) in the housing area will pull money out of their mutual funds and stocks because they need the money for day-to-day purposes? No matter how good the stock market might look in terms of growth, and earnings it still needs investors to participate. I don't think this housing decline is over, though it is more of a regional phenomena.
Personally, I am inclined to shift a little more nest egg into fixed income.
As to Big Al's Casino this week, the bulls keep charging along. The Dow Jones has climbed into record high territory, 12767 for the week. NASDAQ on the other hand is at 2496, at 50% of it's all time high in March 2000, but still moving upward for the year. Housing prices are coming down. Companies involved in subprime loans (loans to risky customers) are experiencing large losses. This gives me pause - if homeowners are defaulting on mortgages, doesn't that create additional pressure on the credit markets? More defaults means less money means less credit, meaning less spending? Less spending means slower growth in consumer goods at least, or big ticket items. At the very least isn't it possible that investors who are overly leveraged (in debt) in the housing area will pull money out of their mutual funds and stocks because they need the money for day-to-day purposes? No matter how good the stock market might look in terms of growth, and earnings it still needs investors to participate. I don't think this housing decline is over, though it is more of a regional phenomena.
Personally, I am inclined to shift a little more nest egg into fixed income.
Saturday, February 10, 2007
The Game
Hello everybody, welcome to Big Al's Casino! Play along, have some fun, listen to some ideas, share your own, it's all good. Thanks for being here!
[Note: One of my readers had expressed an interest in knowing what I DO invest in. As you may recall, in the 'Big Al's Casino' post, I mention a lot of stocks, but only own one of those stocks. So here goes, with an update on my own personal winners].
I have two schools of thought on investing. One, turn most of my money over to solidly performing mutual funds for safety and to use their expertise, and two, keep a portion for myself that I can invest and learn and quite frankly, compete. Can I beat this professional investors, even though I know the cards are stacked against me? The good news is yes. The portion I keep for myself has risen to become a fairly sizable sum, and I will continue to manage it. I call this money 'play money'.
A few years back, I developed a game in my 'play money' account. I start the year with a basic sum, say $30k, and end the year with $30k. It's just 'play money', so whatever proceeds I get, I get to keep for play purposes. (Please note this is not a true number - I am leery of TOO much sharing on the internet). By good fortune in 2006 I was able to extract 25% over the course of the year. I consider 25% gains pretty good. I wish I had made anywhere near that money in my professionally managed accounts! And I was just playing! The proceeds in this case helped me buy another car so my daughter could have one of the older family cars; pay for a ski trip; and fund my Roth IRA account.
I was able to get this 25% return by virtue of a few timely picks (and sells) - Auxilium Pharmaceuticals, Google, Redhat, and McDonalds. The McDonalds story is completely indicative of how I invest. I started watching McDonalds because of a comment made by my nephew Jeff. Jeff was visiting my son Roy and we were all riding home in the car from some excursion. I was talking about investing, and Jeff piped up that if "he had any money, he would buy McDonalds, there is one on every corner". I agreed that's a great point. I went home, looked it up, saw no reason to buy it at the time, but kept it in the back of mind. Years later I noticed a small annoucement in the Wall Street Journal that "Newman's Own" salad dressing was going to be served in McDonalds. That's cool, what a great idea, I thought. That is really thinking upscale. I would eat a McDonald's salad with Newman's Own Caesar dressing on it. I started to notice some other strategic developments at MCD: New guy running the company, slower expansion, tiering their offerings, more emphasis on existing stores, real estate market booming, it went on and on.
I looked up the stock - it was at a 5 year low. OMG! I bought 200 shares immediately at $14 and wish I had bought 2000. This year I sold those shares at $28 and $32. I am kicking myself slightly, because MCD just keeps getting better, and is now up in the mid 40s. Overall, I think the folks that run McDonalds are smart, innovative, and great business people. I am inclined to buy it again should the price come down a bit.
Which brings me to the reason I sold it. I sold it mainly because over the years I was making the classic novice investment mistake. That is, only selling my losers and keeping my winners. After a while, your winners go down, and then you sell them (stupid stupid stupid), and you never ever bank any money. Once in a while you have to sell your winners, that's where your true profit lies. Donald Trump said it best. He was once asked if was he sorry he sold a stock that later surged. He replied, "I made a profit, I'm happy". Okay, fair enough. I also made a profit. I AM happy! Woo - hoo!
Same with Google. This is an awesome, smart, innovately run company. I like that they don't split their shares. I like that they purchase companies to expand their reach, like Utube. I love Google Earth. I like that they dominate the search engine market. I like that TV ads for Pontiac direct you to the Google website. I think they are a little extravagant right now (due to their phenomenal wealth), and due for a correction. But the main reason I sold part of my Google holdings is that I was looking to bank some profit, and I want to invest in companies that might double my money. So I sold it, and bought something else. I doubt Google is going from $480 - $960 a share this year.
Well time to go. Thanks for looking in, listening to my schpeil, and hopefully extending your reach into the investment world. I feel good, I hope you do to!
Big Al
[Note: One of my readers had expressed an interest in knowing what I DO invest in. As you may recall, in the 'Big Al's Casino' post, I mention a lot of stocks, but only own one of those stocks. So here goes, with an update on my own personal winners].
I have two schools of thought on investing. One, turn most of my money over to solidly performing mutual funds for safety and to use their expertise, and two, keep a portion for myself that I can invest and learn and quite frankly, compete. Can I beat this professional investors, even though I know the cards are stacked against me? The good news is yes. The portion I keep for myself has risen to become a fairly sizable sum, and I will continue to manage it. I call this money 'play money'.
A few years back, I developed a game in my 'play money' account. I start the year with a basic sum, say $30k, and end the year with $30k. It's just 'play money', so whatever proceeds I get, I get to keep for play purposes. (Please note this is not a true number - I am leery of TOO much sharing on the internet). By good fortune in 2006 I was able to extract 25% over the course of the year. I consider 25% gains pretty good. I wish I had made anywhere near that money in my professionally managed accounts! And I was just playing! The proceeds in this case helped me buy another car so my daughter could have one of the older family cars; pay for a ski trip; and fund my Roth IRA account.
I was able to get this 25% return by virtue of a few timely picks (and sells) - Auxilium Pharmaceuticals, Google, Redhat, and McDonalds. The McDonalds story is completely indicative of how I invest. I started watching McDonalds because of a comment made by my nephew Jeff. Jeff was visiting my son Roy and we were all riding home in the car from some excursion. I was talking about investing, and Jeff piped up that if "he had any money, he would buy McDonalds, there is one on every corner". I agreed that's a great point. I went home, looked it up, saw no reason to buy it at the time, but kept it in the back of mind. Years later I noticed a small annoucement in the Wall Street Journal that "Newman's Own" salad dressing was going to be served in McDonalds. That's cool, what a great idea, I thought. That is really thinking upscale. I would eat a McDonald's salad with Newman's Own Caesar dressing on it. I started to notice some other strategic developments at MCD: New guy running the company, slower expansion, tiering their offerings, more emphasis on existing stores, real estate market booming, it went on and on.
I looked up the stock - it was at a 5 year low. OMG! I bought 200 shares immediately at $14 and wish I had bought 2000. This year I sold those shares at $28 and $32. I am kicking myself slightly, because MCD just keeps getting better, and is now up in the mid 40s. Overall, I think the folks that run McDonalds are smart, innovative, and great business people. I am inclined to buy it again should the price come down a bit.
Which brings me to the reason I sold it. I sold it mainly because over the years I was making the classic novice investment mistake. That is, only selling my losers and keeping my winners. After a while, your winners go down, and then you sell them (stupid stupid stupid), and you never ever bank any money. Once in a while you have to sell your winners, that's where your true profit lies. Donald Trump said it best. He was once asked if was he sorry he sold a stock that later surged. He replied, "I made a profit, I'm happy". Okay, fair enough. I also made a profit. I AM happy! Woo - hoo!
Same with Google. This is an awesome, smart, innovately run company. I like that they don't split their shares. I like that they purchase companies to expand their reach, like Utube. I love Google Earth. I like that they dominate the search engine market. I like that TV ads for Pontiac direct you to the Google website. I think they are a little extravagant right now (due to their phenomenal wealth), and due for a correction. But the main reason I sold part of my Google holdings is that I was looking to bank some profit, and I want to invest in companies that might double my money. So I sold it, and bought something else. I doubt Google is going from $480 - $960 a share this year.
Well time to go. Thanks for looking in, listening to my schpeil, and hopefully extending your reach into the investment world. I feel good, I hope you do to!
Big Al
Thursday, February 8, 2007
Sherwin Williams
Every day I wonder if I am missing the boat on Sherwin Williams (SHW). I think it is flying quietly under the radar, making money for someone, but not you and me. Today it went up another 0.67%. YTD it's up from 64 to 70. That's nearly 10%. Time to jump on board? What should I do?
Big Al
P.S. I found my solution! I ended up buying short term options on the cheap. That way if it does go up, I can reap some of the rewards. If it goes down, very little loss involved.
Big Al
P.S. I found my solution! I ended up buying short term options on the cheap. That way if it does go up, I can reap some of the rewards. If it goes down, very little loss involved.
Saturday, February 3, 2007
Big Al's Casino
Welcome to Big Al's Casino, more commonly known as the stock market! Watch Big Al navigate the treacherous waterways of the New York Stock Exchange and NASDAQ. Not quite betting on the ponies or the lottery, but the odds might be better here. Thanks for visiting!
I was doing some research on the stock market last weekend and came across what I think are some really interesting stocks and funds. I started off by reviewing some older Wall Street Journal Smartmoney Stock Screens. I have an occasional habit of clipping them out of the paper and putting them in an envelope if they strike my fancy. (I found Redhat this way in 2005). Then I reviewed what the price was at the time the WSJ published the stock screen, and what the current price is now. This is easily done online. I may have looked at about 120, and of those I choose about 15* to do further research on, based on their solid record of accomplishment, though I will continue to look at them all, plus the 30 or so I have in my portfolio. Bottom line, these folks are making money, and you might want a piece of the action.
Here they are with ticker symbol, screen, date, price then, price on January 26, 2007, and percent growth. with % growth based on January 26. And my highly subjective comments, of course!
*Sherwin Williams (SHW) "Insider buying" published 3/21/2006 price then $48.92, now $66.71 up 36%. Yep, the company that make paint. I love these guys buying their own stock. Will need to check to see if they are still buying - stock is still climbing!
*Orient-Express Hotels (OEH) "Mid-caps with impressive growth" 2/7/2006, $32.97 - $46, up 39%. I am in the hotel business, and hotel stocks in general have been strong. And there is a lot of growth opportunity in the Far East.
*Regal- Beloit (RBC) "Mid-caps with impressive growth" 2/7/2006, $36.85 -$48 up 30%. I think they make pumps. Another boring business (like SHW) that makes their shareholders money. Worth a look.
*First Marblehead (FMD) "Unheard of Stocks" 4/4/2006, $44.31 - $55 up 20%. This company provides credit services. Boring but profitable.
Goldman Sachs (GS) "Growing Earnings", 3/28/2006 $154 - $213 up 38%. I don't have a feel for how to track this financial services company. They are obviously doing something right.
*Fidelity Select Transportation (FSRFX) "Small Mutual Funds" 2/20/2006, no price. I like this because it doesn't appear in the paper on Sunday. It's off the radar, you really have to hunt for it, and it's doing well.
Fidelity Select Industrial Materials, "Small Mutual Funds", 2/20/2006, no price, I haven't really checked this one out except to know it's doing well.
*Alliance Data Systems (ADS) "Free Cash Flow" 2/17/2006 $44 - 66, up 50%. This is intriguing, certainly data systems is what communication is all about.
Knight Capital Group (NITE) "Value Stocks" 3/6/2006 $12.63 - $18.46 up 46%, Investment brokerage, with a very low price to cash-flow ratio of -6.3. Making money!
*Salesforce.com (CRM) "Momentum Stocks", 7/25/2005, $22.46 - $42.23, up 88%. All big companies are really into sales and service. This little guy keeps creeping up a couple percent a day, nice steady volume - there is something going on here! ( I bought a small stake last week).
*SiRF Technology Holdings (SiRF) "Momentum Stocks", 7/25/2005, $18.81 - to $29 up 50% as of Feb. 1. These guys make global positioning chips. I love that idea, though I have been burned on chips before. They rocketed up 50% this week based on strong earnings. Another company to watch is Atheros (ATHR) which has been a slightly better performing competitor.
Here's a few others:
WSJ Stock Screen - "Municipal Bonds to Consider"
*USAA Tax- Exempt Intermediate Term ( (USATX)
*Fidelity Intermediate Municipal Income (FLTMX)
*Vanguard Intermediate Term Tax Exempt (VWITX)
Do not keep these in an IRA because you will be hit at ordinary income rates when you retire. But these are relatively safe investments.
"Unheard of Stocks" (with good share growth)
Ocwen Financial (OCN) savings and loans
Skechers (SKX) apparel
*GFI Group (GFIG) Regional investment broker - this stock has been climbling lately.
"Funds for Novices" (terrific three year returns of 27% or higher)
Bruce Fund (BRUFX) small cap
*Alpine Int'l REIT (EGLRX)
ICAP International (ICEUX)
"Bargain Growth"
*Phillips - Van Heusen Clothing (PVH)
I was doing some research on the stock market last weekend and came across what I think are some really interesting stocks and funds. I started off by reviewing some older Wall Street Journal Smartmoney Stock Screens. I have an occasional habit of clipping them out of the paper and putting them in an envelope if they strike my fancy. (I found Redhat this way in 2005). Then I reviewed what the price was at the time the WSJ published the stock screen, and what the current price is now. This is easily done online. I may have looked at about 120, and of those I choose about 15* to do further research on, based on their solid record of accomplishment, though I will continue to look at them all, plus the 30 or so I have in my portfolio. Bottom line, these folks are making money, and you might want a piece of the action.
Here they are with ticker symbol, screen, date, price then, price on January 26, 2007, and percent growth. with % growth based on January 26. And my highly subjective comments, of course!
*Sherwin Williams (SHW) "Insider buying" published 3/21/2006 price then $48.92, now $66.71 up 36%. Yep, the company that make paint. I love these guys buying their own stock. Will need to check to see if they are still buying - stock is still climbing!
*Orient-Express Hotels (OEH) "Mid-caps with impressive growth" 2/7/2006, $32.97 - $46, up 39%. I am in the hotel business, and hotel stocks in general have been strong. And there is a lot of growth opportunity in the Far East.
*Regal- Beloit (RBC) "Mid-caps with impressive growth" 2/7/2006, $36.85 -$48 up 30%. I think they make pumps. Another boring business (like SHW) that makes their shareholders money. Worth a look.
*First Marblehead (FMD) "Unheard of Stocks" 4/4/2006, $44.31 - $55 up 20%. This company provides credit services. Boring but profitable.
Goldman Sachs (GS) "Growing Earnings", 3/28/2006 $154 - $213 up 38%. I don't have a feel for how to track this financial services company. They are obviously doing something right.
*Fidelity Select Transportation (FSRFX) "Small Mutual Funds" 2/20/2006, no price. I like this because it doesn't appear in the paper on Sunday. It's off the radar, you really have to hunt for it, and it's doing well.
Fidelity Select Industrial Materials, "Small Mutual Funds", 2/20/2006, no price, I haven't really checked this one out except to know it's doing well.
*Alliance Data Systems (ADS) "Free Cash Flow" 2/17/2006 $44 - 66, up 50%. This is intriguing, certainly data systems is what communication is all about.
Knight Capital Group (NITE) "Value Stocks" 3/6/2006 $12.63 - $18.46 up 46%, Investment brokerage, with a very low price to cash-flow ratio of -6.3. Making money!
*Salesforce.com (CRM) "Momentum Stocks", 7/25/2005, $22.46 - $42.23, up 88%. All big companies are really into sales and service. This little guy keeps creeping up a couple percent a day, nice steady volume - there is something going on here! ( I bought a small stake last week).
*SiRF Technology Holdings (SiRF) "Momentum Stocks", 7/25/2005, $18.81 - to $29 up 50% as of Feb. 1. These guys make global positioning chips. I love that idea, though I have been burned on chips before. They rocketed up 50% this week based on strong earnings. Another company to watch is Atheros (ATHR) which has been a slightly better performing competitor.
Here's a few others:
WSJ Stock Screen - "Municipal Bonds to Consider"
*USAA Tax- Exempt Intermediate Term ( (USATX)
*Fidelity Intermediate Municipal Income (FLTMX)
*Vanguard Intermediate Term Tax Exempt (VWITX)
Do not keep these in an IRA because you will be hit at ordinary income rates when you retire. But these are relatively safe investments.
"Unheard of Stocks" (with good share growth)
Ocwen Financial (OCN) savings and loans
Skechers (SKX) apparel
*GFI Group (GFIG) Regional investment broker - this stock has been climbling lately.
"Funds for Novices" (terrific three year returns of 27% or higher)
Bruce Fund (BRUFX) small cap
*Alpine Int'l REIT (EGLRX)
ICAP International (ICEUX)
"Bargain Growth"
*Phillips - Van Heusen Clothing (PVH)
And finally, a stock I just stumbled upon in the tables: *MEMC Electronic Materials (MEMC) This stock I found due to recent momentum. They produce semi-conducter wafers. Also check out Mothers Work (MWRK) down lately but seems to be rebounding.
Thanks for checking in. See you next time at Big Al's Casino!
Big Al
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