RD's Picks

Today was a pleasant change from watching my portfolio go down faster and up slower than the S&P 500. CSCO makes up about 8% of my SLO portfolio, and it wasn't even my biggest winner today.

So, how does a one-penny earnings beat by CSCO translate into a one-day gain of nearly 7%? The answer - it doesn't. What drove CSCO today was the higher guidance provided in the conference call and the picture he painted of a very strong business climate, new cycle of internet and networking build-out, outstanding growth in emerging markets, new technologies with exciting growth prospects, and John Chambers stating this is the strongest business environment he's ever seen. Add to that a huge pile of cash as we're entering a time when cash is king. If you at all follow tech / internet business, I highly recommend listening to the CISCO conference call and following along with the presentation slides.

And, if CSCO wasn't enough, about 7% of the portfolio is in Prospect Capital (PSEC), a private equity, closed end fund that lends money to and invests in small energy companies. PSEC has been hammered since the SLO contest began and I've just kept nibbling. This morning, PSEC announced an increase of about 16% in guidance for this quarter's net earnings. The stock closed up nearly 10 1/2% and was up as much as 15% during the day.

I entered several small trades today. Sold off about 1/4 of the PSEC position and used the proceeds to add to the RPM and UL positions. I also stretched a bit and bought a little Novartis (NVS). If PSEC pulls back, I'll buy at least part of what I sold off today back.

Global SantaFe (GSF), American Railcar (ARII) and Chevron (CVX) even had up days at last.

I hadn't planned on blogging this often, but doubt I'll get many more days like this one to brag about.

Disclosure: I own shares in CSCO, PSEC, GSF and CVX

Comments: View Comments |  Wednesday August 8, 2007