MonkeyK's Expert Dogs

Bank aquisitions begin

2007-10-02T17:14:25Z

TD Bank to Buy Commerce Bancorp I mentioned irrationally deflated bank prices as a potential trigger for another round of bank buyouts. After all who wouldn't want to buy good debt at a discount?
Could this be the beginning of the bargain hunting?

Global insanity

2007-09-28T17:00:21Z

US Global Investors (GROW), takes on a fund with 16 million dollars in assetsand GROW's price drops?

Assets under managment is how GROW makes money. Taking over an existing fund is also a demonstration of US Global Invesotors appeal as an investment firm. I will be buying more. I'll also be selling my shares of BW to fund the purchase of GROW.

Follow up on irrational exuberance

2007-09-18T21:08:23Z

Well, I did get my sell on BKUNA...
However, perhaps I am an irrationally exuberant investor. Why did I feel the need to make those trades? Seems to me that I wanted some action. I could see something about to go on, so I tried to capitalize on it short term.

Imagine, I have a million dollars invested, in just a handful of stocks and I want to go tweaking them. A far more sane approach would have me in like 20+ stocks with longterm prospects of doubling, but I already know that I don't have the time for that kind of research. But I find the time to try and time buys and sells in the middle of the day based on 5-10% gains. Kind of inconsistent, huh?

This is part of why I am an amateur.

Anticipating "irrational exuberance"

2007-09-18T18:21:32Z

I anticipate the Fed announcing a rate cut. I will guess that everyone will be relieved and Financial stocks will climb for a short while and then fall.

If this happens, I want to be ready to take advantage of it, so I put in sell orders on all shares of:
BKUNA @ 18.15
ASBC @ 30.15

These are probably high prices, I am really just trying to capitalize on anyone taking the expected news a little too well.

Following any irrational exuberance, should be the realization that we still have to worry about inflation. If either sell order goes through and I get the chance, I will buy as many shares of gold/silver producer stocks as I can. This will will probably involve positions in NXG,IAG, SLW.

what does it mean when two related entities buy a majority stake in a company?

2007-09-14T17:50:12Z

Well, I tried to post this on a the MSN forum, but the forum wasn't having any.

Let's see if anyone is reading this by posting an open question:
I started buying LNX because of all the insider buying that I was seeing, but then I began to see a strange pattern.

Director Conrad L. Bringsjord has been buying like mad with a porfolio that he manages (Clinton Group) buying matching ammounts. Combined they now own 28% of the company. Is there an implication that I should be drawing from this? Is a trend like this good or bad for ordinary minority shareholders?

My take? It can only be good. A search for Conrad L. Bringsjord shows that he is a specialist in mergers and aquisitions. That he and a fund he manages are buying up LNX, I can only guess that he sees the company as a meaningful aquisition target. Since he and Clinton Group have been buying since around $7, I am guessing that they see LNX as worth more than that.

I've never done a blog before. It kind of feels like writing into a black hole. If anyone reads this, please respond with your thoughts in the comments!

Buying Deerfield

2007-08-31T15:20:21Z

I just put in a market order for Deerfield to the tune of the rest of my capital.

Factors influencing this are:
-"Expert" Tobin Smith's recommendation which noted a 17% dividend
-recent massive insider buying
-today President Bush announced that he will propose something to help homeowners avoid foreclosures (this can only help a REIT)

I'm back and dumping everything else into AUY

2007-08-22T13:24:39Z

I've been out of communication for a little while. I guess that I spent too much too fast and felt rather down (both financially and because of my performance). This is a lesson to learn. I tend to want to be fully invested in the stories that I buy, but I should avoid that and try to make sure that I have some cash to put into new stories or better positions on the stories that I have already bought.

Yamana Gold (AUY) is a better position on a story that I already bought. AUY was trading at $15 until they made a bid on Meridian in an effort to buy growth. Buying growth makes a lot of sense in the mining business, after all, where else are you going to get more stuff to mine? Unfortunately shareholders disagree with me and the stock plunged to sub $10. I took this as a buy signal and picked up some more stock. Now Meridian is urging it's shareholders to decline Yamana's offer, if they do, Yamana should be worth about what it was before the bid. If they don't Yamana can get back to the business of growing their mining operations.

I am moving my stake in Yamana to 25% of my portfolio, and plan to sell at around $14.5 safely below the previous peak valuation of $15.4.

Yesterday's trades disappeared, so I have resubmitted them

2007-08-02T17:45:54Z

nothing more to day really than that I find it frustrating.

I'm going to continue my buying streak

2007-08-01T17:26:25Z

In my opinion the negative sentiment towards the finance industry is a transitory thing. Lending did not go away (banks are still making money), and I am not interested in sub-prime lenders anyway. In fact, the worst that I can see happening is that some banks may get cheap enough to become takeover targets.

I will work towards doubling my positions in BankUnited and Associated Banc-Corp by requesting buys for 5% in each today, and another 5% if the price drops again.

Buy BKUNA 3100 shares at $15.9

Buy ASBC 1700 shares at $28.25

I probably should have done all of my buying like this (in 5% increments). I am just used to working with smaller numbers and transaction based fees instead of share based fees.

I'll continue to fill up on Lenox today

2007-07-31T18:00:36Z

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.

Looks like I overlooked one.

2007-07-30T15:32:38Z

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.

Time to start investing

2007-07-30T14:06:57Z

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.

How do I invest?

2007-07-24T02:48:42Z

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.