Early Morning Thoughts

Happy Saturday Morning Everyone!

Yes, I have just had my cup of coffee. I do not know about my fellow readers, but I have become a convert to the Starbucks Via coffee. I am the only coffee drinker in the household, so brewing a pot is not always worth the effort. And while Via is a bit more expensive, I do like it and it is cheaper than running out for a cup. But I digress.

I was thinking this morning that I have passed my five year anniversary of investing using the Magic Formula and I suspect I am pushing five years of this blog. Gad, I am getting older, if not richer. Just think, about 5 years of writing this blog, and I already have 7 followers!

New Purchase Coming Up

KSW will hit it's sell date for me next week. It is not officially on the list, though it used to be when the list went under $50m. I have not yet decided what to replace it with. Here are some thoughts:

• AGX - I actually like this stock quite a bit. They have $5.60 in cash per share. Their main work is construction in the energy area, with public utilities being the main customer. My biggest issue with them is they are pretty lightly traded. While I am far from a whale, I can find it difficult to fill my orders in stocks that may only trade 10 to 20 thousand shares per day.
• CATO - this is a regional clothing store, that seems very well-run (no debt) and is what I would call a "steady-eddy". They pay a decent dividend (3%). My one concern in the clothing arena is that cotton and other raw materials have really escalated in cost and I am not sure the CATOs of the world will be able to pass along the increased costs.
• GA - This is not my typical Chinese stock. They are much larger (over $1b in market cap) and pay a 2.5% dividend. I do not think they'll come under short attack like some of the others as I think it is pretty accepted they are a real company. They are largely in the online gaming business, though they also have a significant stake in a company being called the "Facebook of China".
• KLIC - I already own SNDK, INTC and NVMI, but we are certainly in a bullish phase of companies needed to update their equipment to stay current.
• NSR - not a sexy company, but they are a solid earner, with a decent balance sheet and a decent moat.

Of course, I'd be thrilled to hear your thoughts.

Not Worth The Effort

As my readers may recall, I sold more than 1/2 my portfolio back at the end of June 2010 out of frustration and worries about where the market was heading. Since then I have eventually re-loaded. Of course I sold the stocks that I thought were the "worst". Just for fun, back then I did write down what I sold and what I kept (though it should be noted of what I kept, some has been sold since June 2010). Do people think I sold the best stocks to sell? Well, the title of this section gives a clue. No. Proving once again, that an average investor (like me) really doesn't know which stocks are "best".

Here is a scorecard:

• Stocks I sold - Up overall by 15.23% (excluding dividends). The three stocks that really took off were GTLS (+160%), WTW (+132%) and SOHU (+94%). The three big losers were CSKI (-61%), CEU (-52%) and GIGM (-45%). Notice any commonalities between those three?
• Stocks I held - Up overall 15.58% (amazing!). While the amount was the same, this group was less volatile with only one big winner, CF +108%. NEWN was the only out-sized loser, down 23%.
• My actual portfolio - up 23.1%, so the good news is that I did do better that flat out holding my portfolio from June 29th.
• Russell 3000 - up 23.9%, so I have essentially kept pace with the index since then, though of late it hasn't felt that way.
  

Ed's Talking Stock Update

Here is my weekly update versus Ed. I do not have his Friday number, so he may be a bit over-stated as Friday was pretty ugly.

stock	Initial	Shares	Current	Daily Change	Y-day	Current Value	Total Change
afam	35.17	56.87	37.97	-1.03%	2,182	2,159	7.96%
agx	8.43	237.25	8.68	-0.57%	2,071	2,059	2.97%
amed	28.49	70.20	35.41	-0.98%	2,510	2,486	24.29%
apol	35.35	56.58	44.29	-2.14%	2,561	2,506	25.29%
azn	47.99	41.68	48.82	0.66%	2,021	2,035	5.58%
cbst	21.20	94.34	21.77	-1.09%	2,076	2,054	2.69%
ccme	15.87	126.02	13.10	-0.61%	1,661	1,651	-17.45%
ceu	3.44	581.40	2.07	-1.43%	1,221	1,203	-39.83%
chke	19.81	100.96	16.94	-0.59%	1,720	1,710	-13.48%
cmtl	30.70	65.15	28.20	2.66%	1,790	1,837	-7.33%
cnxt	1.43	1,398.60	2.37	0.00%	3,315	3,315	65.73%
coco	4.24	471.70	5.07	-3.24%	2,472	2,392	19.58%
csgs	19.02	105.15	19.79	0.41%	2,072	2,081	4.05%
dell	13.65	146.52	15.60	-0.84%	2,305	2,285	14.27%
dlx	22.02	90.83	26.11	-1.21%	2,401	2,371	19.71%
eesc.ob	1.90	1,052.63	1.60	0.00%	1,684	1,684	-15.79%
eme	28.02	71.38	31.95	0.03%	2,280	2,281	14.03%
frx	32.24	62.03	32.47	-0.85%	2,032	2,014	0.71%
gme	21.15	94.56	20.05	-0.40%	1,904	1,896	-5.20%
hrb	13.37	149.59	14.47	-1.56%	2,199	2,165	9.35%
idcc	34.71	57.62	46.22	-2.35%	2,727	2,663	33.16%
ipxl	18.29	109.35	22.15	-2.47%	2,483	2,422	21.10%
ksw	3.43	583.09	3.73	-1.06%	2,198	2,175	10.79%
lnc	25.12	79.62	30.92	-0.16%	2,466	2,462	23.29%
lo	81.74	24.47	77.74	0.61%	1,891	1,902	-3.30%
lps	31.13	64.25	34.16	0.09%	2,193	2,195	10.38%
mail	6.84	292.40	7.53	0.94%	2,181	2,202	10.09%
mpaa	11.68	171.23	14.10	-0.70%	2,431	2,414	20.72%
mrx	26.88	74.40	31.24	-1.73%	2,365	2,324	16.44%
msft	26.89	74.38	25.95	-0.94%	1,949	1,930	-2.89%
navg	50.17	39.86	52.10	-0.42%	2,086	2,077	3.85%
nvmi	7.42	269.54	10.39	2.47%	2,733	2,801	40.03%
osk	30.50	65.57	36.22	-1.01%	2,399	2,375	18.75%
ppd	65.17	30.69	65.97	0.15%	2,022	2,025	1.23%
prsc	17.48	114.42	15.47	0.13%	1,768	1,770	-11.50%
pwer	10.40	192.31	8.28	-0.72%	1,604	1,592	-20.38%
rtn	48.33	41.38	51.72	-0.71%	2,156	2,140	7.79%
scei	6.76	295.86	6.69	0.90%	1,962	1,979	-1.04%
sndk	48.00	41.67	47.69	-1.10%	2,009	1,987	-0.65%
solr	7.87	254.13	10.97	-1.61%	2,833	2,788	39.39%
supg	2.60	769.23	2.89	-1.03%	2,246	2,223	11.15%
ter	12.43	160.90	18.98	-0.47%	3,068	3,054	52.70%
tnav	6.86	291.55	11.41	2.61%	3,242	3,327	66.33%
tndm	14.71	135.96	17.27	-0.58%	2,362	2,348	17.40%
tsra	19.93	100.35	17.07	-1.33%	1,736	1,713	-14.35%
uis	24.27	82.41	34.67	-1.70%	2,906	2,857	42.85%
untd	6.86	291.55	5.90	-1.83%	1,752	1,720	-12.54%
usb	24.76	80.78	27.04	-1.82%	2,225	2,184	9.41%
veco	45.07	44.38	47.04	-1.26%	2,114	2,087	4.37%
vr	29.59	67.59	30.71	0.23%	2,071	2,076	4.53%
Totals			-	-0.59%	110,653	109,996	10.32%
Ed	starting 12/3/10						-2.51%