MoneyMiser Picks

I'm dumping some stocks to get some cash. I'm a longer term value investor, so the short term rules are hampering my style somewhat. So it's time for some big adjustments:

GOOG, wow was I wrong about Google being a value between 500-550. Enough said. Also unwinds one of my 10% positions.

DFS, Discover card I thought was cheap as well, but not cheap enough.

JOE, on CNN Money's best of 2008 pick list, and also relatively cheap P/E wise. Just not moving enough.

TRN, I don't know what is going on with Trinity 's stock price. Anything below $30 is an entry point to start buildng a position in my opinion for a long term value investor. They blew away 4th quarter #s, but I guess the skittish traders are throwing the baby out with the bath water as they take the market down to more appetizing value levels. My 401k appreciates that, but not my SLO account.

So with that cash freed up...

1. I'm starting to add to my GS position. Goldman Sachs is poised to BLOW AWAY the street's earning estimates. Think about it, either there is one hell of a subprime skelton hiding in Goldman's closet, or they're just doing what they do best, make LOTS of money. My guess is they're making money. And with the stock about 1/3rd off of its 52 week highs, that's enough to peak my interest even more for a trade.

2. I'm adding to my MSFT position. Microsoft gets better no matter what happens with the Yahoo! deal. This is a relatively historic opportunity to buy a DOMINANT company, with significant moats. Emerging markets will have to upgrade their technology to advance, and who else are they going to buy it from?

3. Since TSO isn't working yet, I'm going to try the Oil services sector. Both Guy Adami and Pete Najarian have been pounding the Fast Money table at CNBC about BHI, and doing some of my own research I agree with them. First, Baker Hughes is close to their 52 week low, which leaves plenty of room for upside. Second, they've got a comparable P/E to Halliburton, but Haliburton is closer to their 52 week high. Third, with oil probably trading at $100+ per barrel for an extended period of time thanks in part to the Fed's decision to turn the dollar into toilet paper, more people are going to want to drill for oil.

I'm still long term bullish on Tesoro. The crack spread eventually must narrow again, and people will still do some driving this summer. That should help the refinery biz.

I'm really tempted to double down on NTRI. They got ANNIHILATED unecessarily in my opinion. Mr. Market had a panic attack of epic order, and this is a long term 300% potential return over the next 5 years. Why? Does America have an obesity problem? Yep. Who's advertising more than jus tabout any other weight loss program? Nutri-System. And they grew the number of MEN on the program, which is traditionally difficult. I probably will not add any more though, due to the short-term nature of this contest.

GLD continues to go left to right as Dennis Gartman would say. I don't see any reason to cash in on it yet.

CSCO is on the right track (finally), and if things continue my big bet on them will pay off. Now the big question becomes will ORCL follow? The CEO's insider selling last month at virtually these same levels worries me, so I'm going to hold back for now. Tech is acting very weird so far this year.

I think the Aluminum names like Alcoa and Kaiser Aluminum, have room to fall. These names have become 2 month trading vehicles in the past year if you look at thier charts. Perhaps some of the blame for that is on the Rio Tinto deal/no deal. Get Howie Mandell on it.

Comments: View Comments |  Saturday March 8, 2008