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Going to Vegas / Accountability in blogging

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April 07, 2010 – Comments (15)

First, I will be landing in Las Vegas with some chums for a bachelor party on Thursday evening.  If any CAPs game members live there or would care to come, I will more than happily set aside an evening and buy drinks for any and all who show up.  Or dinner or whatever.  I am not much into strip clubs as a general rule.  I don't gamble, but I am excellent at sitting at blackjack tables and drinking drinks.  If anybody from here comes, I will do the best that I can to avoid becoming a blithering drunken, ahem, "fool" and remain able to speak!  lol

And, second, I have decided to more clearly post whats in my portfolio and what i'm buying and selling.  Not because anybody should listen to me, but for these reasons:

1.  The massive, brutal bearishness in the blogosphere a year ago almost certainly kept many people out of the market and cost many home-gamers massive returns.  I cannot recall any bears apologizing for their errors or even admitting they were wrong, just stating that everybody is an idiot and they are actually right and so forth.  It pains and maddens me to think about lost returns for people hoping to put some kids through college or retire.  And in general I think the blogosphere, self included, needs to be more accountable.

2.  I have a decent CAPs score.  Not a GMX or Ultralong or Bravo score that will cause people to really listen to waht I say, but high enough that somebody listening in may think i'm smart.  As such, my comments may have the ability to actually cost people money, or make people money.  It seems reasonable to have more accountability.

3.  I had a surrealistically good return in 2009 and from march 2009 to march 2010, almost certainly the best that I will ever have in a calendar year.  IT was also my first year of playing this wild, wild game.  The truth is that I made that money by clinically playing the odds:  buy into a market crash, buy the cheapest stocks via price/book, price/divi, price/earnings, price/forward earnings and so forth, buy the stocks that were beaten down the most, focus on smaller caps in a crash.  Just played the odds as have been well established by market historians.  So I figure I should chronicle whatever successes or failures I have in the future to basically make it obvious whether I am actually good at this stuff, or if I was just good once, or if I'm just good in a crash and coming out of it.  

So, here is about what i'm holding and what I'm doing:

sales in 2010:  I sold out of ASH (not at the top, for about 50 bucks), ACAS (for about $4.50ish), GNW (for around $17), LVS (for about $20), WYNN (lower than it is today).  I sold 1/2 of my JOEZ (for an average of about 2.25-2.50), I sold all the BZ I bought last January (for about 6 bucks).  I sold out of CHK (for higher than it is today, yay!), I sold 1/2 of my TCK (for about 40-42 bucks, not at the recent top).  Basically everything that I have sold this year has continued its relentless march up.  I was probably wrong to sell ASH and TCK, I am comfortable with selling the rest.  I sold out of TIN, PLG, and some more. 

Buys in 2010:  I added to my RJET when it was in the 4s and low 5s.  I am net down on the position by 5-10% or so.  I bought a decent sized stake in NBG and OTE partly on sentinelbrits recommendation and partly on some research.  I added to ATPG.  In the last month I bought a sizeable stake in IRE which I'm currently nicely up on.  I bought quite a few names in the February dip including MCGC, ALD (now ARCC), CNO, BZ, BX, and so on.  

And here's about what I'm holding and how I feel about it:

-residual casinos.  I still have some LVS and MGM that aren't past 1 year and which I'm way up on and don't want to pay taxes on, and I hold some BYD.  I'm holding these with hedges on the LVS and I may hedge the MGM soon.  I am short about 30 call contracts for jan 2011 at $30 on LVS w/o shares to cover them (i'm over-sold on calls).  I decided to keep these after selling the shares because I simplyu think we'll get to see LVS lower than $22 sometime between now and then.  

I wouldn't buy a casino share at todays prices as an investment with the kid who beat me up in Jr. Highs money.  That said, I think LVS is a very tradable stock and its probably going higher, causing me pain, in the near future.  MGM remains vastly un-loved and may at some point finally take off on a bit of a run.  But I'm not buying any more.  

-legacy positions from last years crash I'm holding.  DOW, HUN (stupid to keep HUN at $14 while selling ASH at $50, I am an idiot, I will sign the slip), XL, HIG, LNC, BDCs (ARCC, AINV, PNNT, FSC, PSEC, HTGC, and more), TCK, CBI, BAC, MCGC, various REITs including GGP and HPT and HST, USG (one of my lesser successes from the march bottoms last year), BX, CNO, various REIT preferred stocks.  These still represent the preponderance of my portfolio, the majority.  They either yield alot, or they remain undervalued, or both.   I am going to revisit whether I think these should be held still as the prices move up.   If the BDCs yield falls to 8ish percent I am probably a seller as I simply think I'll get a chance to buy them at 10+ again in the future.  These are all basically in "hold" mode right now.  I'm not really adding to them or hedging them or messing with them, just sitting on them. 

Again, positions I'm way up on from a year ago remain the biggest part of my portfolio.  Which makes my portfolio kind of boring as none of its new.  

-new positions:  NBG.  NBG must be one of the best run banks in the western world.  It also holds vast reserves of Greek bonds and is surrounded by what is sure to prove a troublesome situation in Greece over the next year or 2.  It is largely a bet that Greek bonds don't default in my estimation, with probably 2.5-3x todays share price in ultimate upside if Greece works itself out, and a considerable amount of trouble if Greece fails.  

OTE:  OTE pays a good yield and shouldn't be killed by Greek bonds, and has been beat up pretty significantly over the Greece issues.  

T, VZ, VOD, MO, all of Big Pharma with an emphasis on PFE.  I am, as I described in a blog a month ago or so, betting that the big, stable, dividend paying stocks see some levitation and stand over what amounts to a concrete floor in share price around this years lows.  Bonds suck for buyers today, and these guys yield better and have been overhwhelmingly forgotten in the market recovery of the last year.  I am short puts, long calls, long shares, and long call spreads in these names.  A bet that the share prices don't crash OR that the share prices are at or above todays levels sometime around late 2012.  All options are long dated.  

By far and away this is my biggest move in my portfolio with new money, and I will keep adding to it on weakness or as I free up cash.  ...  leverage (short puts and long calls) aside, the intent is to de-risk my portfolio and shift towards what I see as about the last bastions of big caps trading lower than their historical average valuations.  

IRE:  the bank of ireland.   The winner in the Irish Bank Lotto-of-Losers.  $2.4B market cap, needs to raise $2.7B.  If the shares continue to drift higher, they may be able to raise at less than a 50% dilution.  With book value currently around $8B, adding $2.7B from the capital raise and you get $11B or so.  The market cap after the capital raise (todays market cap + $2.7B) would be about 5B, putting the thing at a price/book of about 0.5.  The companies earnings potential is probably around $1.5-2B in normalized times (based on a discount to historical earnings) and all of that puts a market cap of around $15B as reasonable based on 10x potential earnings and 1.5x book, reasonably typical bank multiples.  So... depending on dilution, that would put potential share price at around 30 bucks.

RJET:  my biggest dud to date as an investor.  lol.  But a consistently profitable airline with two components (one dependent on fuel prices, one not), good dilligent management, a few bucks a share of unencumbered cash on hand, and deeeeeeeeeeeeeeepppp valuation with respect to book, price/cash flow, and price/potential earnings.  Absolutely unloved and completely in the toilet, with no apparent upside catalysts in sight, affected by oil prices...  But I'm not selling until that thing triples from here unless something really changes.    

I would also consider buying:  HIG (earnings potential and valuation), MCGC (yield and valuation, it seems all but inevitable that this thing visits $8 and eventually yields >12% from todays ahre price), RJE, small banks (GRNB, SHBI if it dips again, and more.  I may start a blog hoping for feedback about some of these in the future) that will live and are trading below book.  I'd focus on price/book for valuation here.

In absolutely no way am I familiar with every stock on the market, and frankly I haven't run all that many screens lately...

I am not saying anybody should follow me.  I am not saying that I am not a complete idiot.  I am just saying that in general I think I will begin blogging my actual buys and sells, probably not strictly but loosely, as in the end thatsimply givesothers a better idea to benefit from me, or decide to avoid the living hell out of my advice.

ha!

 

15 Comments – Post Your Own

#1) On April 07, 2010 at 2:12 AM, checklist34 (99.71) wrote:

For Vegas:  we can totally avoid the bachelor party gang if anybody wants to come!

I did get frustrated a week ago and shaved my head so I have a fuzzy head and look a little strange.  I have wasted enough money on booze in that town to probably be able to get us into most any club on reasonably short notice. 

If anybody wants to not booze, but hang out, I love car shopping and we could cruise around and look at pretty machines.  

Or we could so shop for real estate, not that I want any, but it would be REALLY AMAZINGLY interesting to see what this whole ruckus was all about.  Crashing Vegas house prices were a big part of it!

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#2) On April 07, 2010 at 9:56 AM, Momentum21 (94.64) wrote:

thanks for sharing...I will look forward to more of your thoughts...

I think that making decisions public forces you to learn from past moves and better manage risk going forward. I have found the feedback from the community to be very helpful as well and don't mind being called out on being an idiot if based on someone else's well thought out opinion...

the key to outperformance is keeping the dogs to a minimum...sometimes it is more important to keep looking for reasons to sell a holding... 

RJET breaking free today I hope...: )

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#3) On April 07, 2010 at 12:53 PM, sentinelbrit (88.00) wrote:

Nice post! I continue to be bullish. I find it amazing that the S&P has not had a 1% correction for 42 days. I expect we'll get a correction at some point, but I think the economy is recovering, unemployment will come down, people will spend again etc..I keep thinking about consolidating my portfolio but I can still find things to own. Re NBG - I have been increasing my holding in the stock and plan to buy more on price weakness. My average purchase price is now about $4.40. I have decided that this is going to be a big position in my real portfolio. Greece continues to come under pressure and at some point either the EU or IMF may have to draw a line in the sand in order to support Greece. But the bank should survive and ultimately prosper.

Enjoy Vegas!

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#4) On April 07, 2010 at 1:04 PM, RobertFlitton (< 20) wrote:

If anyone would like to consider buying some ridiculously inexpensive real estate while here in Vegas, please DO let me know -- the deals are unbelieveable and the rental market is buoyant if you would like to hold it and rent it.

 Thanks - Rob Flitton

 

robflitton@live.com - www.smartvegasrealestate.com

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#5) On April 07, 2010 at 1:07 PM, Starfirenv (< 20) wrote:

Being a "car nut", you might want to ck this out while there.
http://autocollections.com/
Ever do Hot August Nights? Got B.O.P?

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#6) On April 07, 2010 at 6:37 PM, checklist34 (99.71) wrote:

I am up on RJET!  yay!  not by much, mind, but a few %.  My cost average has sneaked lower than I had thought.  That thing is going to 20. Probably back to $4 soon, but its going to $20. 

Yeah, exactly, Momentum, making decisions public will force me to face up to mistakes more thoroughly than just blabbering in my blog.

I am also recently long AIB for prices about 50 cents lower than todays price.  The position is about 3x smaller than my IRE position.

 

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#7) On April 07, 2010 at 6:49 PM, checklist34 (99.71) wrote:

Robert, I'll send you an email later.  I would love to look around at worst, and I frequently find myself in Vegas, acting like a crazed frat boy

wait, I'm not that good looking, so I should say acting like a crazed farm kid in the presence of endless booze.  lol

 

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#8) On April 07, 2010 at 6:55 PM, marry1122 (< 20) wrote:


Here, there's good news to tell you: The company recently
launched a number of new fashion items! ! Fashionable
and welcome everyone to come buy. If necessary, please
input:

===== http://www.b2b2.us ====

Air jordan(1-24)shoes $33

Handbags(Coach l v f e n d i d&g) $35

Tshirts (Polo ,ed hardy,lacoste) $16

Jean(True Religion,ed hardy,coogi) $30

Sunglasses(Oakey,coach,gucci,A r m a i n i) $16

New era cap $15

Bikini (Ed hardy,polo) $25

FREE sHIPPING

====== http://www.b2b2.us ====

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#9) On April 07, 2010 at 7:02 PM, checklist34 (99.71) wrote:

Starfire, I'm fairly socially ignorant and don't even know what B.O.P. is... 

That auto collection looks unbelievable!  I am 100% going to stop by.

I can't handle a bachelor party for 4 days so I plan on ditching out on booby bar day/night and doing something else.  That looks unbelievable!  

you coming????

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#10) On April 07, 2010 at 7:03 PM, checklist34 (99.71) wrote:

Whats with the spam?

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#11) On April 07, 2010 at 8:45 PM, checklist34 (99.71) wrote:

brit:

I think alot of the jobs that were lost were unnecessary jobs.  Not all of them, not any given readers if they lost theirs, but I think alot of it was trimming of the fat, and I think there is a WHOLE FRICKING LOT of fat in the average workplace.

Does the average white collar worker actually work more than 20 hours a week? no coffee breaks, no chatting, no lunch, no flirting with the cute girl, actual all-out hard work thinking about it living it, no youtube surfing.  Do they really put in 20?  Does the average blue collar worker care at all about their job?  Does the average union worker, and I'm not saying care about the job, I'm asking only do they NOT HATE the people paying them?  

The productivity-reaching-record-levels figures are still, no doubt, nowhere near where they could be if we really pressed things.  

And that probably makes the hit to the economy from unemployment a bit less than most people would think.  Further, some things are on.  Fire.  Period.

I had some biz's I sold a couple years ago to a monstrous multinational company.  The division under which my former biz's are organized had, no joke, an all time, all of history, record quarter in Q1.  Compulsory overtime, massive output, business is extremely extremely good.

And, far mroe importantly than biz being good right now, consider this:  the division had an all time (and this is a multi-billion dollar divison spanning myriad industries, so its not like its a localized anamoly) record cash flow last year.  All time.  Why?  massive spending cutbacks.

and thats why I think everybody has the economy completely wrong.  Its not a consumer led recovery, its a business spending led one, that hasn't begun yet.  The division is still massively cautious, forcing overtime -vs- actually hiring and so forth.  

Once bitten twice shy.   The economic crumble was in no small part due to businesses massive cost cutting.  It follows that the recovery could be led by a recovery in the same.  They have stripped inventories to nil, cut costs to the extreme, and eventually they will tire of paying overtime...  

Remember, the massive contribution of inventories to Q3 GDP (or was it Q4) was STILL A REDUCTION IN INVENTORIES, IT WAS NOT INVENTORY BUILDING, JUST A SLOWING OF THE RATE OF REDUCTION.  

If business spending on capex and whatever simply normalizes that all but ensures a reasonably recovery.  

I have made a great return, and I have harmed that return with every shred of bearishness that I have mustered.  I have net barely won on hedges, net lost for raising cash, net lost for selling out this year as I cleared 1 year of holding (see above), and so forth.  Porte and Awall and all were more right than me in being more bullish.  

I, today, will simply continue to de-risk my portfolio and re-direct funds into stocks I consider more undervalued and/or pay better dividends.  And so be my fate.  

good luck!

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#12) On April 07, 2010 at 10:43 PM, Starfirenv (< 20) wrote:

Buick, Olds, Pontiac. It's a distinction made in GM speak. Motor parts- heads, manifolds, trans stuff is either BOP or Chevy GMC and don't play well together. You did say you were into cars, right?
Currently in the stable-
B- '67 GS California. One of 200
O- '62 Starfire w/ 59k orig mi.
P- '64 LeMans w/ 49k orig mi
You gotta ck out Hot August Nights. Biggest "car happening" on Earth. Had I more notice I would but alas. Enjoy. Regards

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#13) On April 07, 2010 at 10:56 PM, checklist34 (99.71) wrote:

car fiend, yes.  corvette-speakable, mostly.  aware of bop, no.   that is very cool! 

goddamn some older oldsmobiles are epic!  My first car was a cutlass supreme, and what would i not pay to get it back...!

cool, cool starfire

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#14) On April 07, 2010 at 11:12 PM, sentinelbrit (88.00) wrote:

I'm not sure about de-risking. I agree with you on business spending fueling a recovery but the consumer has to factor in at some point - probably the last leg in the bull market will be consumer/housing related stocks doing well. I also continue to believe that the market will peak when Mr and Mrs Smith throw in the towel and start buying equities again.

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#15) On April 07, 2010 at 11:54 PM, checklist34 (99.71) wrote:

brit...  i have been more bearish lately, and wondering if i am wrong.  maybe we just are entering the public-participation phase of this bull run.  leaving us 200 more S&P points to the upside.  Maybe we actually make a higher high this time, I dont' know.

But I am sticking with my bets on big divi paying stocks.  These aren't, mind, necessarily conservative bets.  If AT&T dropped 40% i'd lose my arse on that position (as its highly levered) ...

butr I consider AT&T almost cast in stone at staying at $24+ (my positions are conservative enough where if its $24 i'm still a winner).  

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