From My Notebook and Other Sundry Things

I'll start with the sundry, in no particular order

First: My Fantasy Portfolio is $68 shy of $1,300,000. I still have a single holding IIVI. My rank is 20,627. Not a bad showing I think. It would have been nice to have had an AAPL or an AMZN in there for earnings surprise. I would be happy to have a top 10,000 finish, but I recognize that I've not put so much thought into my investments this past week given some maneuvering in my real portfolio.

Second: MarkM kindly suggests that I should not be too hard on myself for my bearish stance. I agree with him. The self-flagellation that I should be engaged in is my lack of patience with the unfolding.

Third: FMD: My dithering and then deciding managed to have a successful outcome. Sadly, I have to admit to being a bit of an ambulance chaser. What is hard is knowing when the stock is just bouncing a bit (and let's face it, a bounce of 5% or so is not a bad pop) on it's way down further or whether or not you are seeing a bona fide investor panic for no compelling reason. If it is the former, then your becoming enamored with your purchase can be deadly. If it is the latter, then you have a terrific opportunity. Due diligence--quick due diligence--is key; for if you are right, there will be a quick recovery. But we all know that the extent of recoveries is most accurately judged using a rear view mirror. So you have that dithering period between when you bought it/the subsequent recovery (you're trying to figure out if you have a dead feline on your hands) and the stock's catching its breath to either go north or south. I admit, this is the time where my firm conviction at purchase begins to wane, and I doubt myself. I felt that FMD fit the bill of an overdone investor panicked sell-off. So I have Sep40's bought with my gains on buying and flipping the stock. If the calls expire worthless, I'm more than even money on the entire transaction. I also did this with HERO. But I bought earlier dated calls, so I had to flip them quickly. But it was a profitable transaction. I subsequently re-entered my HERO position for a longer term holding (stock, not calls). They have earnings on Monday. I'm okay with weathering any downturn on that.

Now I don't recommend this strategy to any prudent investor. But I'm not comfortable being long this market, so this allows me to make some money (so long as it is successful) while waiting for the end of the world. This strategy has allowed me to make up for my least successful strategy which is to make a bet than "x" is going to happen (through puts) and "x" happens, just not in the time frame I expected. This has been a critical lesson for me to learn--but sadly, I'm a hard headed student and my lesson was more expensive than it should have been.

Look to your own activities where you may have been a hard headed student and see if you cannot get your tuition more cheaply! The point of this is not to suggest any strategies to you (never take any advice from me!), but rather stress the importance of knowing your own weaknesses and strengths, and ensuring that you do not make investment decisions that do not play to those strengths.

Fourth: My Notebook: I enjoy the Barron's interviews done by Sandra Ward. For one's that I particularly like, I print them out. I was leafing through my notebook (after 3-hole punching my "Market Boom" paper) and found a July 24, 2006 interview with Dean LeBaron. Here are some of the points from that interview he states that he

• likes bargains--no matter where they are-- he likes multiples of 2-3 x earnings or 3 x's cash; but admits that those are hard to find.
• makes a map of the GDP of all of the countries to find opportunities.
• is concerned that the USD is losing value and too many portfolios are in dollar denominated assets (Note that this was in July, where you weren't hearing a preponderance of this discussion).
• is concerned that there is too much debt in potentially weak hands. Further, debt used to be based on repayment fundamentals, now much of it is based on refinancing fundamentals--therefore, debt may not be repaid.
• thinks there are too many investment people and that "anything that is likely to be interesting is likely to be covered and well-covered, and not necessarily by intelligent people who are correctly motivated.
• is mostly in cash/cash equivalents.
  
• admits to being a gold bug; but he hopes that gold is the wrong investment, for if it is the right investment that means bad things for most other investments.
  

My Notebook-Advertising

I'm going to preface this post with a qualifier that I'm generally insanely early with my thoughts--which generally means that I get it wrong. Nevertheless, I'll post this.

One area that really takes it on the chin in a slowdown is advertising. A couple of weeks ago, I had Lamar Outdoor Advertising as a possible short. I bought some July 65 puts today. (It is currently trading at $63 and some change--small change, less than a dime.)

I was prompted to take this position because Monster reported slower growth in its advertising business. Also, I've noted that there are a few prime billboards (oh how I hate billboards) that are vacant that belong to Lamar. I'm no technician, but it looks like LAMR is trading at the upper end of its channel. I really do not see much upside catalyst for this stock, though they do have a monster buyback program. I'll admit that I'm a contrarian indicator--so they may end up doing quite well!

(CTML)

Entry from My Notebook

I keep a notebook. I really cannot remember a thing, so writing is a good mind helpmate.

The Economist Magazine had this on it's front cover on 02.10.07:

"Next Stop Iran"

"There is a real possibility that George Bush will order a military strike on Iran sometime before he leaves the White House Two years from now."
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I don't post this to engage in a political conversations. Merely to post a former entry on a currently contemporary matter. While it is easy for us to be dismissive of other countries, I could imagine being part of a government of a country and bristling being told what I could or could not do. We don't really have a clear perspective of that in our country, for we seem to do whatever we want. Acting unilaterally, whether as a person or a nation doesn't win you many friends.

I generally try to not engage in political conversations. I have a neighbor who told my husband that "Leisa doesn't like George Bush because she's just jealous that she didn't go to an Ivy League school." This is why I don't like political and religious conversations, for there (shall I say oftentimes?) seems to be a decided break from discussing the point at hand to a diatribe against the person holding the opinion. Nearly one of the nuttiest things that I've heard said about me.

For the record, I've never had a conversation with this neighbor about George Bush or my like or dislike of him. Moreover, I've never given any consideration to the fact that I did not graduate from an Ivy League school. I've earned a terrific living without that credential. I think, though, that I earned some points when Mark indicated that I received the New Yorker (after my neighbor began to describe the magazine to my husband and Mark said, "Oh, Leisa subscribes to that."). He was dumfounded. Isn't that just stupid that he would be dumfounded? As you can probably guess, my neighbor is a little on the pompous side.

[deep sigh]