Monday, December 10, 2007

Above the Green Line

Almost exactly one month after my Below the Green Line post, I can state that I am once again in the black after a very uplifting day. It was a pretty deep dip. On my weekly charts you can see I went about 30K under water. On my daily charts, I show I dropped about 43K in the red. So yes, it has been a wild ride.

But today reminded me of the scene from Return of the King, when the skies were still thick with smoke and grime but the good guys noticed that the wind had changed. I say that because this could easily have been a bad day. Two of my stocks dropped more than 10% (USHS & TRID). But despite that handicap, the portfolio still outperformed the benchmark.

The TRID bloodbath really bothered me (Trident stock drops on analyst comments). GS took them off their highly recommend sheet. Well, if they were so smart, why were they there in the 1st place? The stock is down over 50% since GS said buy. Now that they've dropped 50% and announced that the next year may be a little rough, GS downgrades them?? Kind of like shutting the gate after the proverbial colt has left. But what I really don't understand is why a bunch of lemmings would sell TRID after the analyst opinion. I expect it is a buying opportunity, but I have been wrong before.

The USHS still has me puzzled. It was on 4x usual volume, but still light (115K shares) in the grand scheme. I just have to assume (for the time) that people went a little nuts and they'll bounce back.

UG (great stock symbol) announced a 28 cent dividend as they are having a record year (United-Guardian Announces Semi-Annual Cash Dividend). Got a big ho-hum from the market, but I can live with a 5.6% yield while I wait for the stock price to appreciate.

CHKE announced their earnings today (Cherokee Inc. Reports Record 3rd Quarter Revenues). They reported at 3pm and then promptly went up 5%. You could have made some "Fast Money" had you been ready. This is not exactly a high growth company, but they are saying positive things about their intl prospects (hope they're paid in Euros!).

Howard Siegel, President of Cherokee, stated, We are pleased with our results for the Third Quarter, fueled by the continued growth of our international royalty revenues due to the successful expansion of our business through our Cherokee World Brand strategy.

I keep expecting them to pare back their 75 cent dividend (9% annual) as that is subsidized in part by a one time windfall. Hope that doesn't hurt the stock when it happens.

Hmmm, hot off the wire: Lam Research to Buy SEZ Group for $568M Hope this is good news! Usually the buyer tends to drop after something like this is announced. Says "neutral to slightly accretive" so that is good. They are a Swiss company traded on the Swiss Stock Exchange.

My portfolio of 10 stocks under $10 had a terrific day as well, up 2.4%. Is the wind changing?


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