Saturday, November 13, 2010

Down Week

It was fun while it lasted. It will be interesting to see where the market goes from here. Will it run off the tracks as John Hussman has been predicting for months (Bubble, Crash, Bubble, Crash, Bubble... )? Or will it stay strong?

My chart shows that is still has been a very good year for me. But I still have scars from the 2008 drop. I am not doing anything major right now. Just going with the flow, waiting and seeing, monitoring the situation....

I am about 8% in cash as I did sell my positions in UTA, CEU and FLL in the past couple weeks.

My most recent buy, SCEI, reported their earnings on Friday morning (Sino Clean Energy, Inc. Announces Third Quarter 2010 Revenue of $24.9 Million and Adjusted EPS of $0.35). I felt very smart early in the day as SCEI traded up from $8.63 to $9.20 most of the morning in the face of an awful day for Chinese stocks. But the weight of the day was too much and they closed down 7 cents. Probably a great opportunity for anyone with some courage. That is essentially three straight quarters at 35 cents, at $1.04 EPS so far this year. Then they were very bullish about the future stating
  • improving pricing
  • Strong competitive position
  • increasing production capabilities from 850k to 1,850k by 3q next year.
They have 34m in cash vs 143m market cap. Yes, I am bullish as well. Of course Chinese small caps are not for the weak of stomach. But in my opinion, the best thing to do is make a list of 4 or 5 that you like and wait for some short attack, then buy a bunch on the cheap. Has worked well for me a couple times and I will likely try again. My picks are
  1. SCEI
  2. UTA
  3. CCME
  4. CMFO
  5. CEU and
  6. NEP
While Friday was a not-so-good day, I did get some solid news from INTC, which is part of my dividend section of my portfolio. They are increasing their dividend by 15% in 2011. This caused the stock to go up yesterday, which was a rarity. The announcement (Intel ups dividends by 15%) is exactly the reason I bought Intel. Tons of cash, scale which provides a competitive advantage and an age where chips are starting to be in everything. Look even at the most recent cars, they all have substantial computer capabilities. I reiterate my view that this is a stock to hold for a decade, and I was thrilled to get 'em under $19.00.

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