Seoul/Brussels, 9 June 2008: The fear of China "locking up" energy supplies around the world is misplaced, and other countries should cooperate with it to ensure a more cooperative international environment on both energy and wider security issues.

China's Thirst for Oil,* the latest report from the International Crisis Group, examines China's need for energy and assesses the impact of Beijing's energy policies on the resolution of conflict by looking at Sudan and Iran as case studies.

China's need for energy is growing faster than that of any other country. Self-sufficient until 1993, China's three decades of rapid economic growth have led it to look abroad to meet its energy needs. While its approach until now has been characterised by oil mercantilism, physical control of supplies and distrust of international markets, it is increasingly recognising the value of treating oil as a commodity and adopting a more open approach towards international energy markets and cooperation.

Chinese companies' investment in oil exploration and extraction in countries and regions suffering from deadly conflict has sometimes led China to take positions counterproductive to conflict resolution, for example in the early stages of the Darfur conflict. At the same time, Beijing is willing to play a more constructive role as it increasingly engages with the international system and learns the limits of a foreign policy based on the traditional principle of non-interference.

According to Stephanie Kleine-Ahlbrandt, Crisis Group's China Adviser and North East Asia Project Director, "As policy options are formulated in the international community for ending crisis and resolving conflict, in the right conditions, China can play an important role in the solution."

International cooperation will be facilitated by a better understanding of Chinese energy policy and behaviour. While many in the country's leadership recognise that domestic policy must focus more on conservation, efficiency, reducing pollution, diversifying the energy mix and upgrading clean technologies, both policymaking and implementation are hindered by conflicting interests at the central, provincial, local and private levels. The need for a coherent energy policy and institutional apparatus to manage energy is more urgent than ever.

The rest of the world's interest in China's quest for energy security has never been greater. "Energy security is not a zero-sum game", says Charles Esser, Crisis Group's Energy Analyst. "Integrating China into cooperative arrangements presents a chance to enhance global energy security".

To read the full report, go to International Crisis Group

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I point this out because I believe a lot of people put way too much effort into investing. And lots of other people feel investing is so complicated and difficult that they can't possibly do it themselves. As a result, they either pay huge fees to professionals (who rarely serve their interests) or put their money in CDs, bonds and money market funds that barely (or rarely) keep pace with the rate of inflation.

I'm not a stock picker. I am responsible for investing the funds of three generations of my family which makes me careful. And I use a system that has served me and my family well, and is proving itself in the SLO competition:

In my next post I'll tell you what my portfolio is invested in and the minimal rebalancing I did to it after 5 months of total neglect.

What Jubak said a while ago that first caught my attention: "The company's biggest growth area is the Middle East, where dollar-rich oil producers are spending to build up their energy infrastructure and to diversify by investing in refineries and chemical plants. With projects diversified across industries from transportation to petroleum to pharmaceutical to defense, Jacobs isn't vulnerable to a downturn in any one sector. Although on current trend, it looks like the biggest danger at the company is too much business. The company's backlog is likely to expand 15% year over year to $11.3 billion when the company reports Nov. 6, according to KeyBanc Capital Markets."

Forbes recently named JEC one of the best 400 big companies in America, saying "Build longtime relationships with, and get repeat business from, blue chip firms. Simple concept. But that's how Jacobs Engineering thrives where other construction companies lag. Jacobs gets 75% of its revenue from repeat customers. Jacobs had record revenues in 2006 of $7.4 billion, up 32% from 2005, earned $200 million, a 50% increase. Jacobs' stock also rose 23% this year, showing the benefits it accrued by being entrenched in diversified areas, and by not being a housing firm. The company has accomplished all this largely by focusing on the domestic market, rather than dipping into the more tempting go-go international construction scene. But that's changing--slowly."

Recently Zack's said: "Jacobs Engineering Group, Inc. (JEC) is a provider of technical, professional and construction services globally. With a gain of 12.3% for the week ended Dec 7, it was a top-performing Zacks #1 Rank. Last week, the company received a couple of new contracts, including a hospital in Brussels and a refinery in India. Earnings estimates for the fiscal year ending September 2008 are up 7.5% over the past three months and 3% over the past 30 days. For its fiscal fourth quarter, Jacobs Engineering earned 68 cents per share, which bettered the consensus by more than 4.6% while also improving on a year-over-year basis. Revenues advanced 15% to $2.3 billion from $2 billion."

Morningstar currently says: "Aggressive Grow Profitability and Financial Health - both As Growth - B This stock is in an industry with a healthy number of competitors, and looking at its sales, it is one of the largest players. [It] has generated market-like returns over the past 10 years, but has done better than average the past five. Note that while a 10-year record is unavailable for this stock, it has been one of the strongest performers in its industry over the five-year period. Most companies in the engineering & construction industry have generated very low returns on assets over the past five years. This company, however, has posted results that are some of its industry's best. Note also that the company has had very strong profit margins, another key profitability measure."

StockScouter says, "A mid-cap value company in the capital goods sector, is expected to outperform the market over the next six months with less than average risk."

The analysts that have the best long term track record on successfully calling the ups and downs on JEC, according to Starmine, are UBS (86% accurate) said "Buy Reiterate" on 10/30/07 Ford Equity Research (80% accurate) said "Most Favorable Buy Upgrade" on 11/16/07.

Because I expect a lot more volatility in the market, I think I'll have the opportunity to augment my position at a good price, so I've put in limit orders to buy more at $90 and lots if it drops temporarily to the neighborhood of $80.

One loan I helped fund, just made in August, is already 67% repaid.

No profit motive; more along the lines of "Those who have more also have more of an obligation to give back". Donating to charity is one way, sharing knowledge is another, and lending money at a fair, reduced or even zero rate to people who need it is another way. On each loan I get my capital back which I then use to make more loans. No interest, just capital.

A Bicycle Trust for strangers you might say.

The Zopa idea appeals to me too. A person in the US starting a small business, for example, can be financed by a number of regular people like me who buy CDs and voluntarily contribute a portion of the interest they could be paid to the person starting the business as a way of helping them.

Personally I really like that concept. It's not charity, it's not taking a risk because the CD is insured, and it's an opportunity to help someone get ahead. I'm willing to give 2% of the interest I might receive back to a borrower whose reason for needing the loan interested or moved me.

Kind of in the spirit of the season.

I do my international microfinance lending through Kiva, an organization I really like. The Gates Foundation is assisting Opportunity International and there are others.

Think about becoming a microfinancier yourself as you celebrate the holidays and count your blessings.

Everyday people are earning higher rates than bank or credit union CDs, even as much as 9.49 - 12.81% returns on cash they decide to lend.

Have you heard of social financing, P2P Lending? It's relatively new, but is creating quite a stir in some quarters. In essence it is individuals making micro-financing loans to other individuals while cutting out most of the middle man banking fees.

In some ways it turns the clock back to "the good old days" when people went to the richest person in town to ask for a loan when they needed one. In other ways, it's cutting edge. Naturally, it's caught on first with young people. Take a look at Facebook's Lenders Club http://www.lendingclub.com/home.action

Now there are more and more sites, some of which are www.prosper.com www.virginmoneyus.com and www.lendersclub.com

One of the newest is Zopa CDs. They are a guaranteed and insured (up to $100,000) way to earn a fixed rate of return for a fixed term. Sounds like a bank. But it's different because a Zopa CD directly benefits the borrowers you pick by reducing their monthly loan payments. https://us.zopa.com/cd/Home.aspx

I haven't tried it yet, but I'm seriously considering a Zopa CD. Let me know if you've done P2P lending or borrowing and how it turned out for you.

I don't think so, as Bianca says.

So I did my "end of the month" portfolio analysis and rebalancing (which I do "religiously" per my diversification system) earlier this week, to be ready to take advantage of a Santa Claus rally. I'm just cynical enough to believe that the Santa Claus rally is a tradition that's too profitable to disappear.

Here's how my SLO portfolio stands at the moment in relation to my plan:

We're $18,886 low in US equities, $38,292 low in foreign equities (having dumped my ill-advised purchase of LDK), $79,829 too high in cash and cash equivalents, $43,049 too low in real estate, and $2,602 too low in commodities (having sold the system-prescribed $10,000 of IGE when oil was flirting with $100 a barrel).

Since real estate is down the most (in my portfolio and the market), I started with making a decision on that. My system calls for real estate to be equally divided between domestic and foreign. My earlier decision to purchase SL Green Realty Group (SLG) was an OK (but not stellar) one made at the wrong time. How quickly it plummeted prevented me from investing in foreign real estate, but now is the time. So I'm going to put $43,645 in SPDR DJ Wilshire International Real Estate (RWX).

This decision presents a "problem" because it pushes portfolio investment in large cap way out of proportion. That means selling all of the GE shares I bought, also at the wrong time, but much less catastrophically. The reasons I bought the GE were sound, but it's a core holding and the portfolio is also seriously under plan in growth for going into "rally" season. So the small loss would be useful at tax time. Out goes all but $19,000 of the GE.

Next, in the foreign assets category, I decided to buy Shanda Interactive Entertainment Ltd. (SNDA) because I found Krish Rathi's most recent post highly compelling and because I'm not a stock picker and he clearly is and has done the kind of research stock picking requires and I have neither the time nor inclination to do. That purchase leaves the portfolio about $2,500 under plan in foreign, but that's close enough.

That leaves me with $92,331 for US equity to put into mid cap growth and $25,800 to small cap growth.

Bianca and I are on the hunt for stocks that meet our standards, and would love to get your recommendations.

As for me, it's been a negative in terms of my competition portfolio, and a positive in terms of the real investments I'm responsible for.

Here's why: I was one of the people who said, "Watch out when the banks report." And I also said I was going to keep all the high flying foreign stock gains I'd harvested safely stowed in cash until the bank-induced crash happened. Was I correct ???? Yes !!!! Did I do what I said I was going to do? NO, I did not. Why? Competition fever. As I watched my ranking slip from 70 to 90 to 110 to 157, I couldn't stand it. Even though I knew I shouldn't and had written that I wouldn't, I did. I bought. And the predictable happened. I lost a lot of money.

Ironically, I'm clearly not the only one who bought when selling would have been a better move or bought the wrong thing at the wrong time. During the worst of the bank-induced crashes I was away, busy with real business and family matters. When I returned last week I found to my amazement that -- in spite of huge losses -- I'd risen to 93 in the rankings. Nevertheless, every single stock I purchased when I shouldn't have has performed worse than the stocks I already owned and should have limited myself to. Hardly inspiring to write about them, though I will at some point because they still seem like good choices purchased at the wrong time.

In the real family trust I'm responsible for, I stuck with caution, allowing the "unnatural" October run up in the market to lift the equity holdings to planned levels, but not investing any cash. What a surprise! The family trust, while down, has faired much better through these down times than my SLO portfolio. Yet when the time comes to buy in the family trust, what I've learned from all of you will help me make better and more profitable decisions on what to buy.

Since my father died, I've been responsible for keeping track of how the investments in our family's three generation trust are doing and making recommendations on what to buy and sell.

I enjoy knowing that what I'm doing is putting "wind in the sails" of the dreams and aspirations of the family, but agonizing over what type of investment to buy and how much to invest in any given investment is - well - agony.

To minimize the pain, I've developed a "diversification across asset types and more" system that answers most of those questions for me more or less automatically.

I've approached my SLO portfolio as though it too belonged to a family trust. My "Little Sister" Bianca, who's helping me with stock picks and with teaching a "101 of investing" class, represents the younger generation, and we're using the same diversification system.

Before the competition began, we set asset type percentages: 40% in US equities, 30% in foreign, 6% in real estate, 9% in commodities and 15% in "safe stuff". Now the November-December rally period is near, we've done our annual "shift out of safe stuff" adjustment, and increased foreign to 35%, real estate and commodities to 10% each and dropped "safe stuff" to 5%.

Instead of waiting for the calendar to tell us to re-evaluate, we decided to use a "down" day before the Fed announcement to assess and make purchases. That happened yesterday.

Here's what the assessment showed: we are $188,568 low in US equities, $56,387 low in foreign equities, $112,870 low in real estate, and $9,544 low in commodities, and, of course, that much high in cash, having salted away gains from foreign equities since mid-September.

It also told us we were $136,858 under plan in large cap, $200,080 under in mid cap and $30,430 under in small cap. We're doing fine in value investments, but need $31,222 more in core/blend and $283,586 more in growth.

Armed with that information and the research we've been doing over the last couple of weeks, Bianca and I made purchases that bring us close to plan. We are reserving $25,000 in PowerShares DB G10 Currency Harvest Fund, a cash-equivalent exchange-traded fund that has gained more than 7% since we bought it. We want to see what happens with our current purchases before we do any final buying.

I'm doing the real family trust assessment early too, but for a different reason: it's the anniversary of the start of my management of the trust, and I'm meeting with my mother in Florida to celebrate, so it will be a week until my next post. Bianca and I will tell you then what we bought and why.

That got me thinking about how mutual funds fit into my approach to investing.

I'm not much in the way of a crystal ball forecaster, but I do look monthly at how market allocations are shifting. Is it toward or away from energy, toward or away from growth? That gives me an indication of what professionals are deciding so I can think about whether I agree or not.

When allocation data is updated, I look at how allocations have shifted in several mutual funds with high long term performance. Are they adding to or reducing particular large positions, are there stocks they've just added? I know the information is out of date by the time it's made available publicly, but it's fresh enough for my purposes.

I use funds for most of my and my husband's retirement accounts, some actively managed, some index. I'm more than happy to pay fees to avoid the time researching and agonizing, especially with foreign stocks and IPO type investments.

Three actively managed funds that have been very kind to my SEP are KINETICS PARADIGM FUND (WWNPX), DRIEHAUS INTERNATL DISCOVERY (DRIDX) and ACADIAN EMERGING MARKETS PORT INSTL (AEMGX).

Do you watch funds? Why? Do you own funds? What are your favorites?

If you're interested in mutual funds for any reason, check out FundAlarm. It doesn't provide what I look at on Morningstar, but it does provide an unbiased and often caustic look at funds, their managers and their performance.

Those of us who are securing our own futures through investing can help make the futures of many others more secure too by simply sharing what we know and do.

I got a shock this week.

I put out an inquiry to my church on whether there would be interest in an adult education class on investing for those who know nothing about it, for those who might have as little as $100 to invest.

Responses started pouring in within minutes. I heard from people who are scraping by on a patchwork of jobs and from a doctor; I heard from retired people and from young parents; I heard from people who have no clue what investing is and from people who have had substantial amounts of money "managed" by advisors from companies like Wachovia and haven't seen a gain of any sort in years.

I discovered that people in fields that help others -- nursing, teaching, social work, law enforcement -- tend to know the least, have the least confidence in their own ability to invest, and yet be the most worried they should be doing more to secure their own financial futures and their childrens'. They are also the most likely to be ripped off by companies that sell them fixed annuities that charge more in fees than the money can ever gain.

As soon as I announced dates for two "101" classes, the classes filled up. Some people have to rearrange their work schedules or get grandparents to baby sit so they can attend. People have come up to me with tears in their eyes, saying what a wonderful thing I'm doing. Yet it's just a few hours of my time, sharing what I already know.

Share the wealth of your knowledge.

Contact your place of worship or one in a lower income community. Parent - Teacher organizations are another possibility. Or you could ask your local United Way or Community Foundation for an organization you might partner with - the organization promotes the class and provides a venue, you present.

If you're interested in sharing the wealth of your knowledge, post a comment (you have to click the title under my photo to get the version with the comment form), and I'll tell you more about what I'm doing and how my classes turn out.

My worst decision was not sticking to my original plan. Had I stuck with it and done NOTHING for the entire duration of the contest to date, my current total would be $1,204,154.75 and I would be in 46th place. My actual SLO portfolio ended last Friday at $1,131,333.65, 124th place.

In real life, I use exchange-traded and mutual funds for 80% of my investments, and use individual stocks as much as possible to get it and keep it balanced across asset and diversification categories and to interest family members, especially the younger generation, in investing.

I've found such a portfolio will generally be fine if you leave it untended for a while, even for months. Contrast the $204,155 gain of my untended-for-three-months EFT plus a few stocks original plan SLO portfolio to Earl Mitchell's apparently-untended-for-two-months portfolio that has lost almost $106,000. On August 24th when Earl was very near the top in the competition.

My original SLO portfolio, like our family trust, would have been largely invested in exchange-traded funds. I would have placed carefully researched limit orders to buy VTI, IWP, JKJ, PYH, DWM, VGK, PID, EEM, EEB, DBV, FXE, ICF, GLD, IGE, PHO, and DBC.

With some of the 20% reserved for individual stock purchases I would have placed limit order purchases for RIO, BAM and NVO. The allocations of each, based on their limit order price, would have created a portfolio perfectly balanced across all aspects of my diversification system and have left enough cash for purchases of individual stocks to balance categories over the duration of the competition. With the drops in the market I was sure August, September and October were bound to bring, I believed the limit orders were likely to all trigger. In fact they did, beginning quite early in August with the remainder being hit on August 16th.

So what happened? Why didn't I stick with the plan? In essence, I got too caught up in a last minute reinterpretation of the competition rules and switched from my tried and true approach to stock picking which I'm not interested in and normally do for very specialized reasons totally unrelated to the objectives of this competition.

Now the truth is, even had I stuck with my original plan at the offset of the competition, I would not have left that portfolio alone. I would have rebalanced it several times by now, because it has become way too heavy in foreign equity (gains averaging about 70%) and real estate (gains of 60.27%).

The result would have been less gain perhaps, but more potential for long term stable growth. In fact, my portfolio would probably have ranked only a little higher than my actual competition portfolio ranks now.

But I would have met my goal, meeting or exceeding my actual performance

* Trailing 30 days
+ Return: 10.69%
+ Did you beat the:
o S&P 500 (return of 6.13%): YES
o NASDAQ (return of 8.24%): YES
o Dow Jones (return of 6.03%): YES

So, on second thought, I think my worst decision was second-guessing myself -- whether it was on my original plan or a buy I made recently to compensate for a mistake I made early on.

It may turn out that deviating from my system to hold 30+% in cash awaiting an October crash may have been another mistake, but I dug out of the August hole not sticking to my original plan dropped me into by holding cash waiting for bargains, and now I simply won't buy when everything looks too expensive as long as I can beat the indexes while protecting 30% of assets -- in the competition or in real life.

In real life several years ago I set myself the discipline of writing monthly to the family to detail how our trust is doing, what has been bought or sold and why, and to evaluate for them what risks and opportunities might lie ahead.

My competition portfolio is a pretend trust fund, and here as well as in actuality I've "harvested" more gains than the system calls for into cash because -- based on my reading -- I expect at least one more debt-related plunge of the markets.

Apparently I'm not alone:

New York Times
October 14, 2007

Banks May Pool Billions to Avert Securities Sell-off
By ERIC DASH

Several of the world's biggest banks are in talks to put up about $75 billion in a backup fund that could be used to buy risky mortgage securities and other assets, a move designed to ease pressure on a crucial part of the credit markets that threatens the broader economy.

Citigroup, Bank of America and JPMorgan Chase, along with several other financial institutions, have been meeting to come up with a plan to create a fund that could prevent a sharp sell-off in securities owned by bank-affiliated investment vehicles. The meetings, which began three weeks ago, have been orchestrated by senior officials at the Treasury Department, and the discussions have intensified in the last few days.

A broad framework for an agreement could be reached as early as tomorrow, according to people with knowledge of the discussions, but many important details still need to be hammered out. Another round of discussions is taking place this weekend, and it is still possible that the parties will not reach an agreement.

"Treasury is very serious about getting some solution in place to take away the fear hanging over the markets," said Alex Roever, a credit analyst at JPMorgan Chase who has been following the discussions but is not involved in them. "It is a very challenging thing to do. There are so many parties involved and they all don't agree.

The proposal echoes the 1998 bailout of the hedge fund Long Term Capital Management, when a group of big banks came together to prevent the fund from collapsing after it made a series of bad bets. And the current round of crisis-driven collaboration illustrates the heightened level of concern among both government and financial players.

While there are signs that the broader credit markets have begun to stabilize after the Federal Reserve lowered interest rates last month, a pocket of the commercial paper market remains under siege: structured investment vehicles, known as SIVs. The fear is that problems with these vehicles could infect the broader economy.

SIVs, which issue short-term notes to invest in longer-term securities with higher yields, are often organized by banks but are not actually owned or held by them. They are supposed to be financed through the issuance of commercial paper backed by pools of home loans and credit card debt, but the loss of confidence in the quality of subprime mortgage bonds has also tainted these securities.

Analysts say that investors have all but stopped buying SIV-affiliated commercial paper, and the worry is that the 30 or so SIVs will unload billions of dollars of mortgage-related assets all at once. That would put intense pressure on prices. As Wall Street firms and hedge funds mark value of similar investments they held to their new lower values, they face potentially huge hits to their profits.

Still, the impact on the biggest banks is even more severe. In times of crisis, they are committed -- either legally or to maintain their reputations -- to stepping in to buy those securities. Banks have already been buying significant amounts of commercial paper in recent weeks, even though they did not have to. But if they are forced to bring those assets onto their balance sheets, they might be less willing to lend to businesses and consumers. That could set off a credit crunch and thrust the economy into a recession.

The proposal being floated calls for the creation of a "Super-SIV," or a SIV-like fund fully backed by several of the world's biggest banks to provide emergency financing. The Super-SIV would issue short-term notes to finance the purchase of assets held by the SIVs affiliated with the banks, with the hope of reassuring investors.

But whether the banks would buy the assets directly or just buy the short-term debt is still unclear, according to people briefed on the situation. So are other aspects, like the amount of capital each bank would need to contribute, how it would be administrated, and the fee structures and cost burdens.

The effort to create a backup fund began about three weeks ago, when the Treasury secretary, Henry M. Paulson, called a meeting in Washington that included the chief executives of Citigroup, Bank of America, JPMorgan and other big banks. With Wall Street firms having almost no luck finding buyers for mortgage-backed securities and derivatives, Mr. Paulson wanted to see what could be done to relieve the bottleneck.

Several rounds of discussions followed -- in Washington, New York and on conference calls -- led by two senior Treasury Department officials: Robert Steel, the under secretary for domestic finance and a former Goldman Sachs executive who is a close adviser Mr. Paulson; and Anthony Ryan, a former investment banker who is now assistant Treasury secretary for financial markets.

Besides hearing from senior executives from each of the big banks, the group also sought ideas from others. Several big international banks, including Barclays and HSBC, have been asked about their interest in participating. The group also reached out to several of the major structured investment funds, as well as big institutional investors in the commercial paper markets.

Ralph Lauren himself, the epitome of fashion, decided the same thing. He exercised options and promptly sold them. A heads up for us to consider selling our shares if there ever was one! Nevertheless, Bianca and I took the time to do our homework, checking MSN StockScouter. Sure enough, the rating had dropped. Reading the details of that report:

"Expected to match the market over the next six months with less than average risk; earnings growth in the past year is holding steady compared to earnings growth in the past three years; price-to-sales multiple is slightly lower than the average for all stocks in the StockScouter universe, not bad for a medium- to large-sized company like RL; quarterly earnings report only slightly lower than analysts' consensus forecast; relative price change and consistency low"

and reviewing the long term reasons we bought it in the first place, we decided that if we really owned RL stock we'd keep it and buy more as the price drops.

But this isn't reality, it's a short term competition, and we're concentrating on doing our best from now until the end of the term of the contest, just as Bianca is with her least favorite class. So this morning Bianca and I followed Ralph Lauren's lead and sold our 260 shares of RL and cancelled our planned limit order purchase of American Eagle Outfitters (AEO).

This sale brings our cash position up to 31%. Like Keith Barton, I don't think this market euphoria is going to survive the earnings reports of the banks, so I'm going to be watching carefully for when it's time to pull more money out of my ever-growing foreign positions so Bianca and I are prepared to hit the "bargain basement sale tables" next week or the week after.

I've read several articles analyzing the effect presidential elections have on the stock market, and it's been negligible. Even the unique and constitutionally challenging undecided month after the 2000 election had no significant effect on the market.

MSN Investing Jon Markman's New Year's prediction last winter included the possibility that President Bush and Vice President Chaney might be impeached this year and Nancy Pelosi, the Speaker of the House being third in line, installed as President this year. Jon said he thought the impact of that -- or any of the other more probably predictions he made -- on the market would be temporary and minimal with all three indexes setting new records by the end of the year.

Personally I think this election is less likely to have an impact on the markets than any in the last 50 years. Business and lobbyist donations have already shifted dramatically from being overwhelming to the Republican Party and its candidates to 50-50. I just read an article that says there are indications that major conservative donors are so upset with the deficit and financial corruption that they may not donate this election cycle and may even back a few very conservative Democratic candidates. In such an environment, it's hard to envision big swings except perhaps in stocks that will benefit or be hurt by policy differences. Health care of
course leaps to mind, but I think most companies are already adjusting their approaches and products since the shift in control of Congress. Now there was a dramatic political event -- the shift of control of both the House and the Senate -- no one was seriously expecting, and I don't recall it's having a negative impact on the market. Think I'll go back and have a look!

Thanks for posing such an interesting question.

The portfolio numbers haven't been updated yet; my portfolio is up more than $20,000 today thanks mainly to those two stocks.

Remember that you have to click the name of the article to the left to make comments; for some reason the form is not available on the featured posting of each blog.

In case you haven't discovered how to enable "comments" on your blog, read the excellent descriptions provided by toroandbruin. It can be done on previous posts, not just new ones. I wish everyone would do it because I've read many posts I would have liked to respond to.

Unfortunately, I should have been more pessimistic on my limit order price for LDK. Profit-taking has knocked the price down considerably. You might want to take a look.

Here's what the Motley Fool's are saying today about LDK:

"A former employee of wafer whiz LDK Solar (NYSE: LDK) has accused the company of inventory-reporting shenanigans. The discrepancy that's been cited would equate to an overstatement of about 33%.

"The company has taken a few actions in response. It made sure to note that this individual, hired as a financial controller, was fired after he didn't show up to work for about a week. This ought to help cast doubt on the claim by creating the image of some sort of jilted, slacker employee. More substantively, the company has conducted a physical inventory check, and contracted an independent party to do the same. The latter is obviously the most crucial to regaining credibility.

"It's somewhat amazing to see how much damage has been done to LDK's stock price by a hint of management impropriety. This is an unfortunate part of investing in a business on the other side of the world. When uncertainty is in the air, that wafer factory starts to feel very, very far away -- if, indeed, there is a factory. (Cue ominous music.) That right there is the psychology of fear at work.

"The selling seems a bit overdone here. That said, even after a 30% haircut, LDK doesn't look all that much cheaper than larger wafer producer MEMC Electronic Materials (NYSE: WFR). MEMC offers a similarly slim PEG ratio, a billion bucks on the balance sheet, and best of all, an absence of drama."

Here are more analyst ratings of LDK:

24-Sep-07 CIBC Wrld Mkts Downgrade from Sector Outperform to Sector Perform
12-Sep-07 Needham & Co Initiated Buy
7-Sep-07 UBS Initiated Buy
18-Jul-07 CIBC Wrld Mkts Initiated Sector Outperform
11-Jul-07 Piper Jaffray Initiated Outperform