GLDD,
TKF, CPNO, PGRX
Our dredging company, GLDD, reported
good results for the quarter and, closing at $6.19 last night, up from $2.33
when suggested
six months ago (though still down about 40% from its all-time high). For me,
this is a long-term holding, as I can imagine its earning $1 a share someday
and selling at 12 times earnings.
TKF
is now more than double where it was when suggested at $5.47
in April, although – like an idiot – I suggested selling
half last month at $9.11. I was worried. And you know what they say:
“A bull market climbs a wall of worry.” Well, I’m still
worried (not specifically about TKF) – it’s just been too easy. At
some point, weeks or months from now – most likely when people have
finally decided we’re in the clear – I think the bear will return.
So if you didn’t sell half your TKF at $9.11, you might sell it now at $11.72. But I’m holding the other half.
CPNO
is now up 80% from where it was last suggested .
. . but down 40% from where it was first suggested
(with some nice distributions along the way), and I am compelled to note that
losing 40% and then gaining 80% barely gets you past breakeven. (Right? If
you start with $1000 and lose 40% you’re down to $600. Then gain 80% and
that $600 becomes $1,080. But – and here is why they talk about the
power of dollar-cost-averaging – if you bought $1,000 of CPNO at $30 and
then another $1,000 worth at $10, you’d now have 133 shares at $18 . . .
rounding everything off here . . . for a total of $2,400, which does begin to
feel like a gain. And the other thing to say about this is that you could now
sell the $30 shares for a loss that will lower your income tax, while holding
the $10 shares for what could be an eventual, more lightly taxed, long-term
gain.)
Of PRGX Chris Brown writes: “Better than expected EPS number
from PRGX today. Aristides Capital has reduced the position size to one-half
of our initial # of shares, having sold some @ $4.85ish this morning. Message
from conference call is that company is in process of reinventing itself,
expanding what they can do with customer data it mines for clients. Has some
good ideas, but realistically it’s going to be a slow process. I think
estimates for next year are still close in spite of the good EPS this morning.
Fundamentally, 8 PE multiple x 66 cents EPS gives a very conservative $5.28
price target. Further upside to that is possible, but is dependent on future
signs of operational improvement. Chart has a lot of room to the upside IF the
stock breaks above $5.70.”
Up
about 50% from where Chris suggested it two weeks ago, I’m
selling half.
HAVE
YOU LOST YOUR MIND AND BECOME A DAY TRADER?
Seriously, what’s happening to me? It’s
like I’ve been invaded by CNBC.
Well, actually not. I think that with money you can
truly afford to lose there are some opportunities. And that the tax
control you get – selling your losers to lower your income tax and using
your long-term capital gains to fund your charitable giving – improves
your odds.
(Right now I own, among others, PARS, AVNR and JAV –
all three of them highly speculative tiny drug companies. As mentioned a
couple of weeks ago at 29 cents, PARS, now 41 cents,
should either be zero or in the $2 to $4 range within the next few months.
Like PARS, the other two await imminent results of drug trials that my guru thinks
should be positive but certainly may not be. Around $2 now, he thinks they may
double if the news is good, drop to $1 if it’s not.)
That said, market timing is very tough to do successfully
– unless you really are in the latter stages of a bubble. (Even random
walkers should have had no problem in 2000 avoiding Internet stocks; or with
the Dow above 14,000 a couple of years ago avoiding most stocks; or with
home prices at the crazy heights they reached around the same time not buying
one.)
So the bulk of the money wants to have “in the
market” should be there through a program of steady investing, year in
and year out – but only money you will not need to touch for many years
– very possibly through plain vanilla ultra-low-expense Vanguard index
funds, as long suggested . . . but now perhaps in something even better:
MAGIC
FORMULA
Kirk
Elliott:
“Have you looked at Magicformula's new investment offering – Formulatrading.com? It looks like
a good way to invest using the rules from Joel Greenblatt’s The Little
Book that Beats the Market.”
☞
It does indeed. There are no guarantees of course, but my guess is that over
time, it will outperform index funds by more than enough to justify the 1%
annual fee (versus 0.2% or so in an index fund). To me, the underlying
rationale is simple and, as I have argued before, worth
considering.