Investment "Logic"

This will be my last portfolio summary posting for the year due to the holidays and my focus around organizing a year in review posting. I expect to be back to my normal schedule by January 8. This was quite the interesting week, that's for sure.  It bubbled and boiled for the first two days in anticipation of the announcement out of the Fed.  On Wednesday, we had our crescendo as stocks launched off of the actual announcement, and then things fizzled out and fell off the table on Thursday and Friday, only for the major indices to  end up lower on the week by 0.3%.  Fortunately, my portfolio fared a little better, ending the week up 1.6% thanks mostly to Honewell and Isis Pharmaceuticals.  Honeywell surged higher early in the week off of their investor conference call.  Honeywell's in-line guidance for 2016, while other companies, like 3M, are guiding lower.  The improved price from ISIS came from no new news, while they did announce t...

It's been a disastrous week for this average Joe's portfolio.  As the market has taken quite a hit, with the S&P 500 down 3.8%, my portfolio has taken a 5% hit.  The biggest losers were Isis Pharmaceuticals, Citigroup, and Honeywell.  Before I get into those particular holdings, let's talk about the overall market.  The hit the market is taking is very much in line with the strong November employment numbers we got last Friday.  The numbers were so strong that since then, we've heard various Fed members making comments that we are as good as assured to see a rate hike - likely a quarter point - resulting from Wednesday's Fed meeting.  It's these realities, in combination with the downturn in the energy markets (primarily oil) that the market is reacting to.  A raising rate environment is a whole new investing environment than I've been working with for the last 5 years.  A rising rate has a number of impacts.  First, the US Dollar typ...

With a holiday shortened week, there wasn't a lot really going on.  Trading was light on volume, and events were virtually non-existant.  We have entered a period of time in the market that has been heavily weighted towards positive gains, though not huge gains.  We see more geopolitical turmoil again, though not enough to make energy surge higher.  Retail in the US is strong, but only in pockets as warm weather makes for difficult apparel sales.  Housing appears to be strong and there's the looming interest rate discussion coming up as well.   The only big event coming in the week ahead will be the November jobs results, which will be announced on Friday.  There will be other government numbers published through the week to keep an eye on, but they typically have little impact past a day or two's worth of trading.   Notes: Stock Ratings: 1 = buy at current stock prices, 2 = buy on a 5-10% dip in stock price, 3 = sell on a 5-10% increase...

Notes: Stock Ratings: 1 = buy at current stock prices, 2 = buy on a 5-10% dip in stock price, 3 = sell on a 5-10% increase in stock price, 4 = sell at current stock prices to raise cash.  Ratings are based upon 12-18 month outlook on stock direction and not necessarily related to moves I make due to financial positioning. Earlier this week, Home Deopt delivered what can only be called an incredible quarter.  The company had sales of $21.8B which turned into earnings of $1.35 per share.  This beat  EPS Estimates of $1.32 on revenues of $21.76B on a quarter that was expected to have harder compares.  Additionally, the key metric for retail - same store sales - was up 5.1% while the US same store sale results were up 7.3%.  These numbers are nothing to slouch at.  The home improvement segment of retail is clearly strong, whereas clothing and other retail appears to be suffering mightily.   With the third quarter's results in, they have als...

Notes: Stock Ratings: 1 = buy at current stock prices, 2 = buy on a 5-10% dip in stock price, 3 = sell on a 5-10% increase in stock price, 4 = sell at current stock prices to raise cash.  Ratings are based upon 12-18 month outlook on stock direction and not necessarily related to moves I make due to financial positioning. On Monday, Isis Pharma announced their third quarter results.  Losses per share came in at $0.30 and revenues were $49.1M.  This had earnings in line with estimates of   $0.31, while revenues were a little lighter than the estimated $52.9M.  Despite the inline to missed numbers, cash reserves increased $50M from the previous quarter, to $800M.  The stock, also, has launched like a rocket and you're looking at an investor trying to stop kicking himself for not following his own rules and buying the stock in the low $40s.  You can't say you had it right if you don't act, but you can certainly be greedy for not buying stock...

Notes: Stock Ratings: 1 = buy at current stock prices, 2 = buy on a 5-10% dip in stock price, 3 = sell on a 5-10% increase in stock price, 4 = sell at current stock prices to raise cash.  Ratings are based upon 12-18 month outlook on stock direction and not necessarily related to moves I make due to financial positioning. Cedar Fair announced their third quarter results on Thursday.  The recorded record revenues of $645M which generated EPS of $2.92.  In addition, they increased their quarterly payout by ten cents, which is a rather significant increase in shareholder distribution.  EPS was a bit below analyst estimates of $3.46 due to currency translation and increased spending, while revenues beat expectations of $633.34M.  This is where EPS is hard to leverage as a gauge for company performance due to the heavy investments that take place to generate revenues.  In these situations, EBIDTA (Earnings Before Interest, Depreciation, Taxes, and Amort...

Notes: Stock Ratings: 1 = buy at current stock prices, 2 = buy on a 5-10% dip in stock price, 3 = sell on a 5-10% increase in stock price, 4 = sell at current stock prices to raise cash.  Ratings are based upon 12-18 month outlook on stock direction and not necessarily related to moves I make due to financial positioning. Last week On Semi reported their third quarter results, posting $904.2M in revenues and $0.23 EPS.  Earnings were in line with expectations, while revenues were slightly below what was expected of the company.  Additionally, the company repurchased just over $100M worth of stock at a weighted repurchase price of $10.64. The quarter was relatively mixed, as there were unexpected pressures seen in the macroeconomic conditions.  China is a major geographical revenue source and slowdowns were seen there across all of the four business segments.  The fourth quarter isn't looking to be a any stronger as management sees the supply chain wor...

Notes: Stock Ratings: 1 = buy at current stock prices, 2 = buy on a 5-10% dip in stock price, 3 = sell on a 5-10% increase in stock price, 4 = sell at current stock prices to raise cash.  Ratings are based upon 12-18 month outlook on stock direction and not necessarily related to moves I make due to financial positioning. Going to my financial stock and finally reviewing their quarter now, we find that Citigroup had a decent quarter - especially when compared to almost all of the other institutional banks.  The company achieved earnings of $1.31 per share on revenues of $18.5B and the tangible book value increased to $60.07.  This is in comparison of earnings estimates of  $1.28 on revenues of $18.62B.  The miss on revenues is a factor, as top line misses do impact stock performance, however, this impact was also driven mostly from currency translation. Since I'm talking about this weeks after the event, I don't think there's really a lot of value in ...

Notes: Stock Ratings: 1 = buy at current stock prices, 2 = buy on a 5-10% dip in stock price, 3 = sell on a 5-10% increase in stock price, 4 = sell at current stock prices to raise cash.  Ratings are based upon 12-18 month outlook on stock direction and not necessarily related to moves I make due to financial positioning. So I way behind on my earnings analysis segments.  I'll try my best not to spout out the completely known information as best I can and keep these pointed and short.   A couple weeks back, Pepsico announced their third quarter earnings results.  Core earnings were $1.35 on revenues of $16.3B.  This handily beat estimates of $1.26 and $16.15B, respectively.  While the earnings number looks great, it's to be noted revenues are actually down 5% from last year due to currency conversion issues.  Venezuela has become such an impact that they are changing the accounting methods on it, as the country looks to confiscate the assets...

Well, last week wasn't a good week for me, as the S&P 500 whooped my portfolio, which took a pummeling.  Despite the fact that the Fed isn't raising rates yet, the market is selling off.  I'm not sure if it's people just selling in anticipation of the inevitable, or if people are scared for other reasons.  Economic data around the world hasn't been great, as some of the US indicators have been lower than expected as well.  I'm guessing this is a big reason for fear - fear that we're heading back into recession.  You do see the consumer staples and utilities appearing to hold better than other sectors lately, and though volatile, the 10-year treasury has also stayed fairly flat.  These facts do help provide some credence to the theory.  The problem with that is that those indicators are usually poor tells to how the businesses, themselves, are actually doing.   In addition to the overall disdain to equities that we're currently seeing, th...