Vad's Best Ideas

It was a bitter sweet surprise for me on Friday afternoon after I was finally able to take a look at what the market has been doing that day. WSJ.com had finally confirmed what I have been preaching here at SLO for quite a while- "Labor Department reported that overall consumer prices last month rose by a seasonally adjusted 0.8% from October, the largest monthly gain in two years. Prices rose 4.3% from a year earlier, the highest such jump since mid-2006."

This press release on inflation has offered at least a partial vindication of my long standing belief on the eventual outcome of the Fed's actions. I have received a number of negative e-mails questioning my judgment almost every time I mentioned my disapproval of Ben and Co's job. The truth of the matter is simple - inflation has been and still is a very real threat and hopefully the number of Fed "rate cut addicts" will decline somewhat in the next several quarters due to the fact that while Ben and Co have done some damage already they will have to think harder when January meeting comes due...

Last six weeks have been a very challenging time for me personally, as I have been working diligently towards a very significant potential change in my future career direction. As a result I've had very little time to devote to the SLO contest or any other personal hobbies even though I tried to post as much as I could. My portfolio performance has been solid and while I am not number one at the moment I can't blame it on my bad judgment or poor stock selection quite yet. I have been simply out "SOLF"ied for the moment.

But I am willing to make another contrarian bet- SOLF and most other solar stocks will trade at significantly lower prices during the next 6 months or so. Momentum always hits the wall and unfortunately while I personally believe that solar energy makes a lot more sense than ethanol in the long haul, current valuations of most players are simply irrational and thus can't be sustained for a long period of time.

Finally after six weeks of almost no activity here come some trades in my portfolio:

Sold GTIV,GILD, SLXP and EBAY- still like all four but PTNR sell off is way over done, so I am buying more- up to 9.5% of my portfolio, plus I need a better hedge against potential emerging markets decline- so also buying FXP, and more MGI

More coming from Vad in the next two days,

Trade safe and cheers,
VY

Comments: View Comments |  Monday December 17, 2007  |  Stocks: EBAY, FXP, GILD, GTIV, MGI, PTNR, SLXP, SOLF,