MonkeyK's Expert Dogs

How do I invest?
Monday July 23, 2007 : 10:48 PM

The profile thingy doesn't give me enought space to explain myself and, worse yet, doesn't tell me that it doesn't give me enough space, so perhaps an introductory blog entry will improve things.

My investment strategy is to read what the "experts" suggest, pick the storys that sound reasonable to start with, weed out anything glaringly wrong (like buying a stock when insiders have recently sold it for less), and then try to buy at a discount from what the "experts" paid. Essentially, I am buying their "worst" picks, but those that they still seem to have confidence in. Or maybe I am buying the picks for which the bottom has already fallen out. I admit that this is probably not a great strategy, but, as an amatuer, it's the only thing that makes sense to me so far.

Performance-wise it seems to mostly work. Sample runs have me up around 20% in six months.

The problems with what I am doing are:

1) The lower price could be a signal that others already know that the "expert" is dead wrong
2) While I have a buying criteria of "less than the expert paid", I have no idea what to set for a selling price. I tend to sell if the price jumps by more than 10% in a day without any news.
3) I have no idea how much risk to take in any one position.
4) I am poor at identifying glaringly wrong things, I bought into the hype of BBC both in a the sample run described above and in my personal account and was clobbered for it.
5) I am overly swayed by terms that I do not know how to evaluate. Terms like "good management", "solid fundamentals", and "reactions are overblown"
6) I have gut level trusts of "experts". I have a lot of faith in the analysis of experts whose stories make sense to me more often than not. However I have never really analyzed their performance other than ranking in Strategy Labs.

I am welcome to any comment on how to address my shortcomings as an investor.

Time to start investing
Monday July 30, 2007 : 10:06 AM

So the Strategy Lab Open begins today. What a great day for the start, everything is cheaper than if I had started last week.

I put in orders to buy
BKUNA 5,800 shares at $17.23 This was based on the last round's Value Shopper Nancy Z(? sorry Nancy, I am horrible with names and can't get to the last round summary) recommendation. She pointed out that Bank United is being affected by the sub-prime fallout, even though their loans are not quite sub-prime loans.

GROW 4,700 shares at $21.00. Based on Ken Kam's recommendation. As a fund management company, managing funds related to the energy market, there is no reason for US Global Investors to fall with energy price fluctuations. In fact, in my opinion, they should only be able to do better since they can buy lower and sell higher. I suspect that their funds will perform very well and they will attract more investors, resulting in higher profits for US Global Investors.

LNX 14,000 share at $6.89. This is my own selection. This stock has done very poorly over the last few years because the company decided to coast rather than put energy into new ideas. Well, leadership has changed, and they are taking a fesh look at everything. Leadership appears confident enough that insiders have been buying all year.

BW 2500 shares at $39.25. I saw this on some Motley fool anouncement. Usually I ignore them since I often see an announcement seeming to say one thing on one day and the exact opposite on the next day. However, occasionally, I like the reasoning and take a closer look at a particular company. In the case of BW, I do not remember why I decided to take a look, but I did, and noticed that there is a LOT of insider buying going on at arount $41.

ASBC 3400 shares at $28.9. This was Kelley Wright's pick and I like it for the same reason that I like BKUNA. Bank stocks are out of favor, even if they are profitable. Take some sub-prime fears, add some mildly bad news and you have an overreaction.

CX 3100 shares at 31.25. Another Ken Kam pick. It seems that investors do not like the companies that they own to buy other companies. Personally I do not mind if the acquisition makes sense. Cemex buying Rinker, for example seems to make sense: the aquisition is so worthwile that Cemex thinks they will make money right away.

PTEN 4300 shares at 23. My third Ken Kam pick (I tend to like what he has to say). I am actually a big fan of alternative energy, but in the short term, whatever I like, our addiction to oil and gas WILL be fed. And that means drilling.

Whew! If all of that goes through, I should be in compliance and can take a breather while I look for some more good deals.

Looks like I overlooked one.
Monday July 30, 2007 : 11:32 AM

I also put in an order to buy

AUY 8800 shares at $11.25. I don't know what got me into AUY. I think that I saw it in someone else's portfolio in another challenge. In the end, I feel that I should own some gold, and that Yamana is trading at a great price because, again, investors react badly to aquisitions as a means to achieve growth. In the case of mining, this is irrational since, it's not as if the aquired company is doing mining in the same place. Yamana has it's sites set on being a big player, and I think they will succeed.
I am also generally impressed with the regular status reports coming from Yamana, they seem to want to clearly communicate how they are achieving their goals.

I'll continue to fill up on Lenox today
Tuesday July 31, 2007 : 02:00 PM

My order did not quite complete yesterday. I was only able to obtain 10560 shares. I will take advantage of the even lower price today to bring myself closer to a 10% position and put in an order to buy 3440 shares of LNX at $6.5.