Today the market is in another downturn. Downturns have been pretty regular lately, and they are not usually just a little down, but more than 100 points down. Sure, there have been bigger drops than that before, but it is the frequency of these downturns that is now the concern. Since the beginning of this year, both the Dow and S&P are in negative territory, or at best, struggling to break even.

That leaves an investor with few options. Staying in cash is certainly a decent option, as at least you may not be losing money, like much of the market is right now. Buying into gold is somewhat of a hedge, and may keep up with the major indexes, or beat them slightly. With the fed pouring money into the economy, the value of the dollar will drop, and inflation will go up, even if only slightly.

But, is there anything better than gold? Well, one could argue, platinum right now, as it has seen prices rising at a rapid rate lately. But, that is pretty much another precious mineral too.

Today, I think there may be something even better, and it is a stock that meets all of the demands of "I Eat Bear". The stock is (TNH) Terra Nitrogen. Yes, in this case, I think nitrogen, may be the base product to beat gold, especially for this stock.

Why?. Well, as a chart fan, the trend has been only upwards in the last year. But, in this case I think there is a far better reason. The dividend. TNH is paying a dividend of 14+%. Hummm?
As long as the stock price does not drop significantly, there is a good chance to beat the current interest rates at least. Even with some drop, you could still be ahead. And, with the market as a whole looking for places to put safe money, this could easily be one of the places they look. As they do, this could force the stock price up, even in the unstable market we have right now. And, it has one of the lowest P/E ratios in the sector, something else that makes a bear eater very happy. Take a quick peek at the earnings estimates. I like what I see there too.
The demand for agricultural fertilizers should be up this year too. Another boost.

Now, I don't even know if the strategy lab processes a dividend, or not. I do have several stocks in my portfolio that have hefty dividends. The stategy lab, is a game. Making money in your portfolio, is not. This stock shows every reason to have price growth plus a hefty dividend.

Is there a downside to this stock? Well, they may experience some increasing cost structures to production due to high oil prices. They have a profit margin large enough to absorb most of that, if need be.

So, today, I added this to my portfolio, and I think I will be adding more to it later. Lately, I have been taking a beating on some solar stocks, and if they do not turn around fairly quickly, they will be toast, and TNH may well be my "flight to safety".

Will it beat gold in the near term? I think it has a very good chance to do just that.

Comments: View Comments |  Friday February 22, 2008

We have all had a stock that takes a dip. Most of us had ridden a stock down way too far. I wish I could give you a golden rule about when to sell, but, truthfully I can't. I am not sure anybody can. As mentioned before, charts can help with that decision, but ultimately, it should be your faith in the fundamentals of a company as to whether you keep or sell it.

And, not every decision you make will be a good one. Don't let that get you down either. Practice makes perfect, everywhere except the stock market. Sometimes, things there just don't make sense. Stock may exceed earnings estimates, and the stock price may fall. And, I have seen earnings misses, and the stock price go up. Mostly though, and earnings miss means a big drop. I find myself guilty of that today, with (STP) Sun Tech Power. I should have known better. A day late, and some information short, and I am guilty. On the day I was so busy looking at charts, I neglected to look at recent news. While the chart looked good, and still does, they predicted an earnings miss, and today they got it. The result was a 15% drop in stock price today. Yes, I had added another 100 shares to it just the day before, so my losses now, are bigger than before. OOPS.

If a stock is good enough to buy in the first place, it may be good enough to hold for a longer term. OK, solar is risky, and often over-priced right now. The P/E ratios are sky high on most of them, and that is particularly risky in the bearish market of late. Not something a person who goes by "I Eat Bear" should be doing? Possibly, that would be correct. Then again, a good uptick in the sector could make me right where I want to be.

Now, the market has a fairly long memory, so it may takes a few months before STP looks like it may recover on stock price, but I think it will recover. And selling now, would likely be a big mistake. I do not want to lock in losses.

And, to tell on myself some, I was trying to sell half of my position in (GME) Gamestop. But I pressed the "buy" button, instead of the "sell" one. Ok, I laughed, and then sold to the correct level. Sure it cost me some, and the stock just is not showing me signs of quick recovery, despite a decent chart. Yes, I kept some of it anyway, but, it still is not my favorite sector.

Then again, I will mention two of my still favorites. Both BHP and DO were down pretty good after I first bought them. But, they are both either back into positive territory, or very near to it.
My point on this, is making money on a downturned stock, is still making money, in the long run. There will always be stocks that are down for some short periods. You did not plan on the downturn when you bought it, but it did drop anyway. Hopefully, that will be the case with only a few of your purchases. In a diversified portfolio, some stock go up, and some down, on most any given day. Maybe they dropped due to the whole market dropping, or maybe just that sector that day, or as did DO and STP, they had an earnings miss. But, if the fundamentals on a company are good, hold that stock. While you may have lost money on the way down, you could easily make money on it, as it recovers. To turn it back into a profitable stock may just take longer than you expected.

Maybe I should practice what I preach sometimes too. One of my golden rules, is never ride a stock down more than 20%. Usually, down 10% starts getting me to look at the company fundamentals a little harder, and often that will lead to reducing some positions in that stock.
But, to be very honest, I have been wrong on some there before too, and kept them beyond that 20% drop level. I know I am not alone in that boat either. All I can say there, is shame on me.

But, you need to have FAITH, in the companies you are picking. You picked them for a reason. Don't let short term market adjustments cloud those decisions.

I am pretty sure I was right to make BHP, DO, and yes, even STP part of my portfolio. Maybe my timing was bad pertaining to when I got into them. But, as I withstand some of the short term pains, I do expect long term growth from these, and my fingers are not on the "sell" button for any of these,,,,,,, TODAY. They are not my children. I will part with them, when the time is right. Will it be during this game period? My guess right now, would be NO.

And to add a little humor here, well, am I always right? Heck NO! Then again, my portfolio is making money. Maybe not fast enough to win the game round, but I have not lost FAITH either.
My picks still have a chance because I made good risk vs reward decisions, and have enough diversification to withstand some short term losses, especially in a single stock.

Now, pardon me, while I go kick myself a time or two, for some of my blunders.

Comments: View Comments |  Wednesday February 20, 2008

A key part of managing portfolio growth, is knowing what to buy and what to sell. Most of that will depend on you, and your risk tolerance. Some will depend on your expectations of what certain market sectors may do in the near, or long term, future. Whether you chose near vs long term, will undoubtedly affect your outcome some too.

The market as a whole is showing little tolerance right now, and there have been more and bigger down days than up ones. That could make for a great case for holding cash in high yeild mutual funds. It is guaranteed, slow, steady growth. There is something to be said for that in a market like this one. But, it is not much fun, and it may not make the best returns.

So, let's examine some other stategies. Well, there are some stocks that offer dividends near what many mutual funds pay. (DSX) Diana Shipping is one. This is a good company, but in a very volitile industry, in terms of stock price. It may not work for some of the less risk tolerant investors. If you want stable stock prices with medium stock price growth, and a tolerable yeild, maybe you should look to (T) At & T or (GE) General Electric. Larger, more stable companies, provide good long term capital that compounds nicely over time.

But, bigger is not always better. Nor, is it always worse either. Typically, it just means slower.
When the market is up, they grow slower, and when the market is down, they fall slower.

Then there are questions about what sectors will do best. That is a big part of how your portfolio should be allocated. Obviously, if one sector is in phoenomenal growth, you want a lot of it, and a sector under-performing you may want none of.

Bigger or smaller, oil or banking, dividend or growth, those are the kinds of decisions an investor has to make. Then there is buy, versus sell.

It does not take a rocket scientist to figure you want to sell high, and buy low. That is the way to make money, whether it is the stock market, or a household budget.

So, first, I suggest pick a direction. Determine your tolerance for risk, and pick sectors you expect to do well.

I am fairly risk tolerant, but not to the degree of concentrating on micro cap growth. You could make or lose a lot of money that way, and the scale tips a little more toward big losses than big wins. Nor, do I want to deal exclusively with large lumbering giants that provide reliable, but slow, long term growth, especially, in a short term game, like this lab is.

Now, I have limited myself on some sectors. I have avoided banking. It is not particularly my area of specialty, and the sector has being going down the crapper lately. I expect that to continue. I am heavy in oil, industrials, and materials. I expect at the very least, some stability in those sectors, if not a fair degree of growth over the next two years.

Quite simply I want market beating returns. A good way to determine that, is to look at chart patterns. So, I made some initial stock picks, and I think they were all good picks, although all are not beating the market right now. So, how do I improve on that?

There are some simply awe inspiring chart patterns out there for many companies. (ATW) Atwood Oceanics, (FSLR) First Solar, (POT) Potash, (MON) Monsanto, and TBSI, to name a few in this portfolio.

And there are some in this portfolio, that are not so awe inspiring too. Not that they are not good comapies, or don't have good potential, just that they are currently underperforming compared with other companies, and the DOW and S&P as a whole. I simply can not afford to keep stocks that are under-performing anything, in a short term game, such as this is.

So, I am about to make my first sells, and soon, some buys, on stocks that are at the bottom of chart patterns with good growth potential. The stocks I will sell, are all good companies, but I think I can beat the growth, by picking other good companies. Actually, I will not be adding companies, as much as increasing positions in ones I have.

My underperformers are not based so much on what has been made or lost, but that they simply do not have the more rapid growth I need. So, here is that list. (BA) Boeing, (OSK) Oskosh, (DD) E. I. Dupont, (GFI) Gold Fields International, (CCL) Carnival are all underperforming the DOW right now. Under other circumstances, that could make them a buy, if the rapid growth potential was there. I see growth for them, but not fast enough. I do like them all however, for a very long term investor. Then I have a few, bairly beating the DOW too, like GLW (Corning), (IRBT) I-Robot, and (HON) Honeywell, and (TEX) Terex, so at the very least, I will be reducing positions in them.

Why? Because there are som SCREAMING BUYS out there right now. Yes, the energy sector has most of them, but each sector in my portfolio has some. They are all near the bottom of chart patterns that show great growth.

You just can't go wrong with energy. (SLB) Schlumberger is cheap!, as is (SII) Smith International, (STO) Strat Oil, (MRO) Marathon, (NE) Noble, (CVX) Chevron, (NOV) National Oilwell Varco, and (DO) Diamond Offshore Drilling. I will be adding to ones I have smaller positions in, and (SLB) is a MUST!

In industrials, my buy list is actually some of the stocks in my portfolio which have been under-performers or marginal performers, but that list includes (CBI) Chicago Bridge and Iron, (FWLT) Foster-Wheeler, (STP) SunTech, (MTW) Manitowic, and (CMI) Cummins.

In health care, I do like (MRK) Merck, and I have it as a buy, but I may have to reduce position on it right now, simply because I see more growth elsewhere.

Then there are some stocks at the top of their chart patterns, and selling high, is always a good idea, but these are also some of the best to hold too. (TBSI), (JOYG) Joy Global, (RTN) Raytheon, (GG) GoldCorp, (KGC) Kinross Gold.

Buys I would love to make in other sectors, (BHP), (FCX), (RIO), (LVS), (GME), (CY), (TSL), (LDK), and (KO). Some of those will have to wait, either because I have a large enough position in them now, or I just plain ran out of funds.

I might add, a current down postion in a stock, is not always a reason not to buy it, and an up position, is not a reason to keep it. Nor, should we ignore those factors, when making decisions.

But, I like chart readings, and I think they can tell you a lot about when to buy. Buy on the uptick, after a big dip, with a lot of DOW beating growth. Use Bollinger bands, and look at trend growth. Charts can also be useful on when to sell, but avoid temptation to sell, just because a short term trend line points down. You may want that later, and the price to buy it back, may be higher than what you sold it for.

Comments: View Comments |  Friday February 15, 2008

Once again, I added some stocks, and increased positions in a few more.

I added TBSI and added shares to DSX. Shipping is a very volatile industry, especially in stock prices. To add these now, is a little like being a day late and a dollar short, as they went up significantly today. But, that is telling me the beating that shipping has taken lately, may be the beginning of a significant turnaround.

Solar also had a stellar day today, so I added LDK, ASTI, and FWLT. This is another volitile group of stocks, with Foster Wheeler (FWLT) being by far the most stable of this group, and the best diversified. All of these stocks have great chart patterns. Ascent Solar Technology is the riskiest in my opinion, as they are not making money, and have yet to produce anything. But, the stock price is reasonable. It is $12 under it's 52 week high, and $15 over it's 52 week low. So, it is in the midpoint, and if the market is kind, I should get good stock price growth. LDK is a Chinese solar wafer producing company. It is one of the most pure plays on the solar industry, but not quite the market leader, which I think is First Solar (FSLR - also already in my portfolio). But, the stock price on LDK is much more reasonable than FSLR, so rather than add more of a stock with an expensive price, I added one with a more reasonable stock price. It also adds more diversity to the portfolio.

I also took this opportunity to add shares to RIO and FCX. They are both good companies. RIO produces iron ore, and FCX is in gold and copper. I simly did not have enough of that in this portfolio.

And I might take a moment to defend the down-troddon in my portfolio again too. As luck would have it, two of my favaorite holdings are currently my biggest dollar losers. Yes, they are BHP and DO. No, I do not plan to get rid of them for short term under-performance. These are EXCELLENT long term holdings. BHP is the largest, and most diversified miner in the world. Investors simply have not had faith in the BHP plan to take over RTP (Rio Tinto). I think this aquisition will occur, and it will be a good thing, in the long term. In the short term however, the cat fight will hurt the BHP stock price. But, BHP is a good fundamentals company, and has excellent long term growth potential. Diamond Offshore Drilling (DO), simply had an earnings miss. Not a big miss, but a miss none the same. And the stock price is suffering for it. As one of the best deep water drillers for oil, in a year with projections for increased drilling activity, I have to believe this stock will take a positive turn in the near future. OK, because they took the big dip down early in this game, I may not get the nice returns on them that put them at the top of my dollar winners. They have some ground to make up first. But, I continue to believe in long term investing, and as a long term investor, to fail to have positions in BHP and DO would just be foolish, in my mind.

As I look at my portfolio, I am beginning to like what I see. It is reasonably diversified. Not in all sectors though. It has no banking, limited health care, no real estate, and very small consumer staples. I can live with that. Those may be becoming turnaround industries and sectors, but I just don't think they are ready to contend with mining, industrials, and energy, which my portfolio is loaded with. So, I am counting on slow and steady wins the race. Now, I do have a fair number of very volitile stocks in this portfolio. They could shoot either direction, on any given day, and likely will. I live in hope, that they go up in the short term particularly. I also have many good dividend stocks, so there should be some growth there as well. I have recently reduced my cash position, and am now pretty close to fully invested in stocks, which is what this game is all about.

I am not a "day-trader", so you will not see me making a lot more trades. I did my homework, and picked what I consider to be many of the best stocks for the next two years. Yes, the game will be over before then. Picking good companies is about long term growth, and ultimately, that is part of the game too. Especially for your own portfolio.

And lastly, I would mention I have a reasonable number of stock picks, not a ton of them. I have no doubt a few winners of the round will have fewer stock holdings, and be sector limited. While it may win the game, it is a poor way to manage a portfolio. One should never have so many stocks, that you can't keep up with the fundamentals of each on. In short, don't over-extend yourself, but stay diversified. Probably, if you have more than 50 stock holdings, you have too many. Keep in mind, you still need time to evaluate companies that are not current holdings, as well as the ones that are.

Comments: View Comments |  Wednesday February 13, 2008

An imprtant part of any portfolio management is load balancing, and I have done some of that recently, but failed to report on it. I will correct that shortcoming now, in part.

First I added positions in QMAR to the tune of 600 shares. As an aquisition target of Excel Maritime (EXM), it is just plain under-valued. the takeover price put it at just over $26 a share, with $13 a share to come back in cash and almost half a share of EXM for each QMAR share, it offers both cash back, and shares of EXM. And EXM will retain the management of QMAR.
If I made a mistake here, it would seem to be I did not get enough of it.

I wanted more gold stocks, so I added Goldcorp (GG) and Gold Fields International (GFI). Both are gold mining companies. Niether stacks up to Kinross Gold (KGC) as a gold mining pick, but they add a reasonable diveristy at a time gold prices should be going up. I will also be adding 200 shares to Freeport McMoran (FCX) on the next dip.

Yes, I still needed more plays in oil too, so I added (SLB) Slummberger, which I consider to be the best internationally exposed of the oil drillers. I think the price is a bit high, but it can still go higher. I also added (STO) Strat Oil. I expect some stock price gains, but moreover, I expect a 4% dividend to be paid during this game period. They don't pay dividends by the quarter, like many companies, but more like annually. There is limited down side to this pick, but they do miss earnings periodically. I will gamble there is not going to be an earnings miss in the near term. They really got pounded for the last one.

The rest of my changes were to just add shares to existing picks. So far, some have been good additions, but some have not. I added 400 shares to DO and BHP, and 200 shares to IRBT.
I still maintain BHP is a great long term holding, as is DO. BHP is in the middle of a hostile takeover of RTP, and that is killing both stocks right now. BHP would go up, if they just walked away. Still, that may not be the best long term decision. I stick to my guns, and my faith in this company. DO had an earnings miss. Not a big miss, but the market is very unforgiving on those for the short term. Still I believe in the earnings growth I see for them, and think this will be an excellent pick for the long term also. I also think they will entertain the idea of a stock split later in the year. While a split does not increase value in the short term, more shares of a company that should maintain a growth mode, does make long term dollars and cents,,, and good common sense. IRBT is a gamble, and always was. I like the growth potential here, but it is too small of a company to say just when that turnaround may come. It is also in the technology sector, which has been a favorite whipping boy of the market lately. Still, despite it's drop lately, I did add 200 shares here. I will wait for a month or so, and re-evaluate that choice again later.

The rest of my load balancing has for the most part, worked out better. I added 200 shares to (KGC) Kinross Gold, as I needed the best of the gold miners. I added 200 shares each to (CMI) Cummins and (JOYG) Joy Global, both rising stars in industrials. And I added significantly more oil services with 300 shares of Smith International (SII) and 400 shares of Weatherford (WFT). I added 200 shares of (NOV) National Oilwell Varco, the premier of oil rig builders, and 600 shares of (RIG) TransOcean the deep water oil driller. Despite being in the red on my RIG pick, I have to believe it is still undervalued. And once the pains from the merger with Global Sante FE are absorbed, I expect them to come back with some benefits for the stock holders, in the form of increased dividends, and a stock split. Both of those actions may be after this particular game ends, but I got the stock for basically a steal. The 5% downturn I show on this one today, is just a growing pain, and I expect it to be back in the $140 range on stock price very soon.

Some disappointments I have my eye on are (CBI) Chicago Bridge and Iron, (TEX) Terex, and (MTW) Manitowoc. These are all in heavy construction, or suppliers of heavy construction equipment. Even industrial construction is being impacted by the housing construction crisis.
For right now, I am sticking with the fundamentals I see in these companies. I would even like to add positions to them, but the market is giving me no reason to do so right now.

I even have my eye on some of the banking sector, and specifically, some credit card companies. I just don't think the time is quite right to add them,,,,, yet.

In the next few weeks, I expect to add a few more stocks, and or positions, so that I am about 90% stocks, and 10% cash. That will relate to converting 10% cash to stocks. But, I am in no hurry. Lately, the downs have been more severe, and more frequent, than the ups in the market.
That is a fine reason to keep the cash on the sideline,,, for right now.. In general, I prefer to buy, and hold. If it was good enough to buy in the first place, it is good enough to hold, especially through a short term downturn.

Comments: View Comments |  Monday February 11, 2008

A recent question was posed about the proposed success or failure of Dryships, and as somewhat of a follower of the shipping industry, I will briefly explain why that is not currently a pick for this portfolio.

Last year, Dryships had an incedible run up in it's stock price. I think they may have had to redesign some chart patterns to keep up with the near 1000% growth they accomplished in just a couple of months.

Personally, I never did own Dryships, but last year, I wish I had. Instead, I owned another shipping stock that did nearly as well, and that was TBSI. This one is not a current stock pick either, but it is a personal favorite, and well may be added later.

But, I do have three shipping stocks in this portfolio, and despite recent underperformance (but they are recovering), I still have faith in the shipping industry.

This is just my own personal opinion, of coarse, but I think the best management team in the industry goes to QMAR. They maintain one of the most modern fleets, but not the biggest by far. The thing against QMAR, is a very high debt level. And, it has been announced that QMAR will be merged with Excel Maritime. Excel got a heck of a deal in my opinion, if just in the management team they acquire in the merger, and in the longer term, I expect some good things from Excel. In the shorter term though, I will likely accept the $13 per share cash, and divest 50% of the Excel shares, until the growing pains of the merger are over. But, the QMAR philosophy, of share holders first, has made them a marvelous company to own stock in.

There are other good shipping companies too. Diana Shipping has taken a pounding lately, and it is in my portfolio today.This is another great management team, and the more than 5% dividend, shows they are concerned enough to make share holders happy. This was in addition to the more than 35% stock price growth they attained last year.. But three things have eroded most of that growth. First, the market as whole has taken a serious dive, and DSX got it's share of a hit there, right along with everyone else. Secondly, shipping is somewhat seasonal, and we are coming off of downturn months of that cycle, so I have some faith in some upcoming recovery. And lastly, has been the Chinese protest of shipping prices of iron ore. The Chinese can bouycott all they want, but it can not last indefinitely. The giant will fall to it's knees, and beg shippers to deliver the much needed ore, at most any price. And, I fully expect shippers to demand that price from them, in the near future. When they do, I will be giving serious thought to adding TBSI to this portfolio, as I do like their management, but compared to others in the industry, the TBSI yeild is just a little low compared to others in the industry, for the current risk of the market. But, both TBSI and DSX, in a good growth market, I expect will outperform the market as a whole. But, that is when the market is a little more risk tolerant, and it definitely is not right now. For now, I will stick with just the dividends on DSX, and hope for some stock price growth, that should follow in the coming months.

Another entry in this portfolio is ATW. I have not followed this one closely enough yet, but it has a near pristene balance sheet, and low debt made it worth the chance. That too says something about the management team, and I see that as a positive for this stock.

In short, you may have seen that I have based many of my decision on shipping stocks based on the management teams. I have not favored the management team of Dryships for some reason. I think they kind of blindly fell into the right spot, last year. The most recent acquistion of Dryships, was not more of what got them success last year, but a venture into to oil drilling. This is not showing me a great deal of dedication to their own industry. Now, I do not fault them for diversification, but I am not awarding them points for it right now either.

TBSI, GNK, EXM, and many other shippers, are actively increasing fleet sizes. Much less so with Dryships. Do they know something I don't? Well, I just don't see it that way. The time it takes to build new ships, well, I expect market demand to well exceed shipping capacity through at least 2011.

Do I like the shipping industry. ABSOLUTELY! But, it has taken a beating lately, and more than once I have been tempted to "jump ship". But, in the end, I still have to believe, "the water is just fine, c'mon in". Bulk up (drybulk) NOW, and enjoy the seasonal uptrend in stock prices that go with it, and consider a partial pullback, in maybe October.

But, I think there are better plays in the industry than Dryships. They will do OK too, but I far prefer DSX, TBSI, GNK and some others. I see hope for ATW, and yes EXM, in time. And, I will be sorry to see QMAR go, as I take my checks to the bank!

One unrelated item I must mention. I have been doing some load balancing on my portfolio, which included adding to some positions, and adding a few new stocks along the way. A lot of it is just getting this portfolio compliant, as it is a first time setup for me. But, in a few days, I will be updating those changes in this blog.

On the whole, the portfolio is a little down right now. I am not playing this as a game exactly, but more as a long term money manager. I think the dividends should hold me at par, or better in a rough market, like we have now. If the market gets over it's current attitude problem, I have some stocks in this portfolio that could do some fantastic growth runs too. For now, I think I have reasonable, but not excessive, diversity. In the end, I think I will still be competive. I may ride a few sectors (oil, gold and minerals, industrials, and yes, shipping are my favorites right now), but will not ride just a few stocks just to win a game. There just are not many "rockets" in the market right now, so we will hope we can get started with some "firecrackers", and build them into rockets as we go.

Comments: View Comments |  Friday February 8, 2008

OK, I made a mistake, and will rectify some of that here. The mistake, well, the portfolio starting balance is ten times bigger than I thought it was. We should all be woken up to find we have ten times more than we thought we did! So, I will be doing some significant buys, on mostly excellent companies.

Buy at the open the following:

200 shares GLW
200 shares DE
200 shares MON
200 shares POT
200 shares DD
200 shares CCL
200 shares KO
200 shares TEX
200 shares MRO
200 shares RTN
200 shares BA
200 shares MRK
200 shares HON
200 shares SII
200 shares WFT
150 shares SNHY
200 shares FSLR
200 shares CY
200 shares FCX
200 shares RTP
200 shares ATW
200 shares GME
200 shares COP
200 shares CVX
200 shares LVS
1000 shares ABP

I will start with a correction, and an amount on ABP. Whereas, I had initially intened to balance out a 100K portfolio, I am now using a 1M portfolio, and more than 1000 shares of ABP may involve more isk than I want to add right now. So, instead of the balance of cash, I want a mere 1000 shares.

Secondly, I want to address SNHY. It has taken a virtual pounding lately, so I find it a scary stock and want a limited amount of it. But, when I inially bought it (for real), it went up 20% the day I bought it. It could happen again. But it also dropped 50% from that level, and of coarse, I was on that wild ride too (but should not have been). But, it is a market leader in valve technology, specifically used for oil rigs, but also other applications. I have to take that chance here, that it may rebound, as it has been beaten down pretty good. Still, the p/e of 19 has room to drop still, but it once was 30. Which way will it go? It will go with the market as a whole. I believe in the market, for the long term, but the short term right now is more bearish, and may get worse before it gets better.

This is also a good entry point to discuss LVS. Again, the P/E here is phoenomonal, but it too has been beaten back. Two years ago, LVS was based in Las Vegas only. Now, it is in Macau, Pennsylvania, and has options on Japan. It has a great deal of yet unrealized earning potential.
As such, it has earned an entry in this portfolio.

Solar energy is getting a lot of attention right now, so I picked two market leaders. FSLR is the top solar candidate to succeed in my opinion, but a wholly owned subsidiary of CY is a cheap entry into that as well. CY also adds a smidgeon of more diversity to the technology sector, and has been beaten up pretty good lately. I hate to buy high, and I likely am with FSLR, but I don't think we have seen the top on this one yet.

Mining is just plain a good sector, as raw materials are currently, and will be in need for generations to come. FCX pays a good dividend, is well run, and a leader in the sector, and in returns. What is not to like there? RTP is in the midddle of a hostile takeover from BHP, and China does not like the takeover attempt at all, for fear of price increasse to the natural resources they so desperately need. It has gone up substaantially lately, but I just don't see any downside potential. Nobody will let the bottom drop out here, as too many people have too much to gain by supporting it.

ATW is not the best of the shipping companies, but it does have a stellar balance sheet. I add it here for just that reaon.

Oil services will be up , in my opinion due to increased drilling activity in 2008, so I add SII (Smith International) and WFT (Weatherford). Both are leaders in the field.

BA (Boeing) and HON (Honeywell) are good aviation suppliers. BA for it's 787 which should hit production next year, and Honeywell for it's cockpit solutions, and helicopters, plus it's interactions with the defense industry. RTN (Raytheon) is also a good player here, so have added that as well.

MRO (Marathon Oil) is at present my entry of refining. I chose them for a recent pounding they took for an earnings miss. I think they will bounce back from that miss, but it may take a while.

TEX (TEREX) is a good construction bet, as they make a lot of heavy equipment need for that industry

CCL (Carnival) is an A+ rated company with a reasonable dividend.

KO (Coca Cola) is a well run company, expanding it's global presence. Global growth should make money here.

GLW (Corning) is a player in glass and cable fiber optics. It should do better than the market as a whole, assuming there is no deep recession.

DE (John Deere), MON (Monsanto), POT (Potash), and DD (E. I DuPont) are all entries to support agriculture, a growing market segment,and all top notch companies with absolutely beautiful chart patterns.

GME (GameStop) - this will be my one entry into retail at this point, and it is based on my belief more in kids, than retail. Kids come in ranges of ages of 4 to more than 80, but it would seem video games are a growing market. Rather than make a choice for a particular game maker, choose one the largest retailers of all video games. The thing that gives some edge here, is the sale/resale of used games, as well as new ones.

Last, but not least is major players in oil and gas, that do vitually everything from drilling the well, to refining, to retail. For this I chose the number two and number three players, and go with CVX (Chevron) and COP (Conoco Phillips). I suppose I could have gone with Exxon, but let's go with the idea that number two and number three, just have to try harder to be number one. I think they will, and that will means dollars added to this portfolio.

Comments: View Comments |  Monday February 4, 2008  |  Stocks: ABP, ATW, BA, CCL, COP, CVX, CY, DD, DE, FCX, FSLR, GLW, GME, HON, KO, LVS, MON, MRK, MRO, POT, RTN, RTP, SII, SNHY, TEX, WFT,

Buy 100 shares of NOV at the open
Buy 100 shares of RIG at the open
Buy 100 shares of MTW at the open
Buy 100 shares of CBI at the open
Once all that is done, I will take the remaining balance and buy ABP

A lot of my portfolio will look like mid-cap mania once it is complete. This certainly carries a risk, when large caps have recently been outperforming. It will also be a little heavy in the oil sector, which can't be helped right now. Despite falling oil prices, demand for drilling services should be up this year, and many these companies should do well, so I am adding more here.

One other item I might mention, is that for the most part, I have selected stocks with fairly low P/E's. In a potential (or very real) bear market, I find low P/E values to be much safer than some other stocks I like, Las Vegas Sands, for instance. But, the P/E is just to high there for my taste, the way the market has been acting lately. But, there are exceptions for every rule, and I will be making just that in selecting MTW and CBI.

I am not expecting barn burning returns from this portfolio. But, in the last round, the winners were under 5% gains, while many of the rest lost money. The market conditions have not improved since the last round, so safety, while fully invested, has been my goal. If I can end the round, north of a 10% gain, I may be a contender.

NOV - I like for the backlog of work they have, to create new drilling rigs.This company is not going away any time soon. Actually, I picked JOYG for much the same reason, but I find a much more favorable P/E with NOV.

RIG - another premiere oil driller, and it is going through some growing pains. It recently acquired Global Santa Fe, and will see synergies from that late this year. It however, does seem to have a compelling buy on it, as I think it is undervalued for the assets it has.

MTW - cranes, refrigeration machines, and ship building. Seems like it could at least add some diversification to this portfolio. Add that I think it took more of a beating in the recent market crashes than it deserved, and it could rebound nicely (or not).

CBI - Up until about two months ago, this stock had been on a recent tear to the top. Yes, it has taken a beating too, lately. If market fundamentals improve, this could well exceed the market. Then again, if it gets worse, the P/E here has plenty of room for more drop. So, I just hope for the best on this one right now.

ABP - Well, I don't think one small cap will kill me, and with P/E of about 3, it looks like it may get it's run up, and still be safe enough if the market tanks further. It has an excellent balance sheet. By the way, the P/E of three, says it's earnings should pay for the stock price in three years. In a short term game like the strategy lab, well, it may be just the right play. I would not invest a ton of money in this, but I think it may well have some long term potential. Any small cap stock, has a considerable risk, and this one is no different. It should be safer than many others though.

Comments: View Comments |  Friday February 1, 2008  |  Stocks: ABP, CBI, MTW, NOV, RIG,

Buy at the open 150 shares each of BHP, DO, DSX
Buy at the open 250 shares each of IRBT, KGC
Buy at the open 100 shares each of OSK, JOYG, NE, RIO and CMI

I like the fundamentals on all of these stocks. While they may not be picks that will win the round for me, I think they are solid enough stocks to limit much downside, and present enough potential for gain to be worthy investments.

BHP is one of the largest global mining companies, and is a well diversified in the mining sector. I count on the needs of China, India, and the growing, albeit slowly, global growth. I think this is an excellent long term holding.

DO is one of the best positioned deep water drillers for oil, and I foresee an increase in drilling activity in 2008

DSX is a dry bulk shipper, and that sector, until last week has been pounded beyond belief. I may be a week late getting into this, but it still produces a nice dividend, and is in an industry that should not be ignored, until late fall anyway.

IRBT may be a good play on the defense sector and the technology sector at the same time.
I see some potential for some short term gains here, but will be very happy with 15% return.

KGC is a gold miner. With fed rate cuts there will be inflation, beyond normal. Gold is the best hedge. It is also a well run company.

OSK is another defense industry play, and another superb company. It too has taken a beating in the last year an a half or so, so I am looking for a turnaround here, and soon.

JOYG is probably a better pick for the second half of this year, but to wait that long means paying too much for it later. I will take my chances with this one now.

NE is another premiere oil drilling company. I like Schlumberger better, but the NE stock price
is not so high right now to mean it could not outperform some of the more expensive stocks.

RIO cannot be ignored because of the growing need for steel. It too, is a well run company, and had a good run last year. I expect a good run this year, at least until the olympics.

CMI is another beaten down company in a great position. With regulators limiting emmissions, and Cummins having one of the best solutions, it is hard to ignore this stock. It is also going through some post stock split blues right now, but I expect that to turn around shortly.

Comments: View Comments |  Friday February 1, 2008  |  Stocks: BHP, CMI, DO, DSX, IRBT, JOYG, KGC, NE, OSK, RIO,