Tuesday, February 20, 2018

We Did it to Ourselves

Perhaps you have enjoyed my posts about the stock market (mostly in the correct direction) or laughed at my good-natured jibes at modern America, or had a chuckle over my disassociated viewpoints about things and stuff.

Well - I’m guessing that is about to come to a crashing halt.

The most recent school shooting in Parkland, Florida - and by “most recent school shooting” it should alert you as to what is coming - has brought to mind several things that you humans have been debating but have brought upon yourselves.  What?

The good-old Second Amendment to the Constitution, for one.  It was written by a group of white slave-owners who also believed that one shouldn’t vote unless HE was a land owner.  This came in a time when single-load muskets were technology, and militias were formed to fight-off British invaders.  Gain some perspective.

Nowadays (I’m sure you’ve heard) we have semi-automatic weapons, and guns that can fire-off hundreds of rounds a second.  Not only that, but the militia has been replaced by an on-call military that doesn’t have to dress-up in their homes to defend our nation. We pay taxes for that.
AND, they supply their own weapons. Go figure.

The part you get hung-up on is the idea that the Founding Fathers were some sort of supernatural sages who foresaw a nation where muskets and citizen army’s were going to be normal.  It’s not.

They didn’t have any idea that children in school would be shot to death several times over the last 30 years, or that people going to concerts would have to fear for their lives, or that people boarding airplanes would have to remove their shoes ... you get the point .... right?

The second amendment is an antiquated notion, and we lean on it out of habit - not out of nevcessity. Nobody outside of the military needs an automatic weapo, and it’s not what the second amendment meant by “the right to bear arms.” You know that.

We entrap ourselves with a lot of old-world notions that have no place in modern society.  You accept computers, cell phones, air conditioning, and other such modern conveniences - yet you will not accept the idea that a notion brought about 200-plus years ago is somehow relevant to modern society.

Meanwhile, your children are being gunned-down in your support of this stupid idea.

So, go ahead and un-friend me, un-follow me, dislike, or whatever - hate me - because your politics or your ideals conflict.

The fact is - if it wasn’t for that ridiculous notion put forth on July 4, 1776 your kids would be safe because you wouldn’t be beholden to an antiquated notion of what you refer to as “freedom” because some guys with their heads in stone on a monument said it should be so.

Get your fucking head out of the sand.

Thursday, January 11, 2018


It's not much, time-wise, but this is a graph (I know, I said "charting") of the S&P 500 sectors' performance during the year so far.

Unexpectedly (probably) the top growth sectors are coming from the riskiest areas, while the staid, old-guard stocks are underperforming.  Make of it what you will, but so far, the growth in our market is coming from some surprising areas.

It will be worthwhile to look at this again after earnings season, which kicks-of on Friday with the big banks.

OK, so here's your chart.  I took a look at this today and, even though I don't put much faith in charting, some things are too difficult to ignore.

It's a five-year chart of one of my favorite stocks, Salesforce.com (Symbol: CRM)

If we go back to May of 2012, and draw a line along the peaks in the stock, we can see that it has achieved higher highs, all the way through to late July of 2017.  In addition, during that same time period, the lows have been higher as well.  There has been a breakout from that trend that started in January of 2017.

Recently, the stock broke through the high-line into a new area, where it traded today at 109.10 - up significantly since I first recommended it in on December 15.
So, what now?  I like Salesforce (CRM) here, and would buy it in the 103-105 range, as it appears to be worth around $130.

So, what now?  You have two choices:  (a) you can anticipate the trend line and figure that the stock will continue higher, into the 130-range, or (2) you can wait for it to fall back to its low trend line, or somewhere in between - back to the 105-range.  I really can't see it trading back to that 75-to-80 level again, unless there is some major misstep with their earnings call, which is coming on February 28, when the company is expected to post earnings of $0.33 per share.

Yes, that makes the stock highly valued, and as such, any sort of negative news or lowered estimates will send investors running for their profitable exits.  But, that's the game, right?  They have to be able to convince Wall Street that the growth ride will continue.  If there were any sure things, you wouldn't be reading this.

Make of it what you will, do your due diligence, and invest wisely.

Friday, December 15, 2017

The Monthly Update

If you’re following along - and why wouldn’t you be? - you would have been reading about my pride and angst over my investments and their consequences. It’s a struggle, but fun. Strange, and fun.

I didn’t sell anything - much to my joy and dismay.  Square has begun to trade along with Bitcoin, and Pfizer seems to have found a new life with the FDA approval of a new drug.  Such is life for drug companies.  It’s the risk-reward scenario that we embrace when we invest.  The stock has approached its 52-week high, and I suspect that it has room to run here - and my patience is being rewarded.  I no longer view the stock as a potential sell, especially with the new tax plan.

Darden Restaurants reports this week.  I don’t own it, but the “pin action” may translate to my favorite DelTaco (TACO) and its struggling $12 stock price.  In other news, the new 21% corporate tax rate may help dissuade DelTaco’s current 40% tax rate and help them control some of their labor costs, which have been dragging down the stock price.  I still view it as a growth story, and would encourage buying in the $12 range.

Sometimes, I wish I could avoid the enthusiasm of the market.  I began dribbling money into Under Armour (UA) a month ago, to the extent that I accumulated 20 shares.  Today, a major brokerage house released a “buy” recommendation on the stock, and it shot-up to $13, which is way beyond my buying price.  If I owned several hundred shares, I’d be a seller on Monday morning.  But, since I own a paltry amount, I’m going to hold and wait for it to settle down - either through a disappointing quarter or the natural reaction of the market.  Whatever - I believe that buying UA at a price over $12 is setting yourself up for a disappointment, and I’m not in the game for disappointment.  I’m holding here, and waiting for a better buy price.

So, what now?  I like Salesforce (CRM) here, and would buy it in the 103-105 range, as it appears to be worth around $130.
Skyworks (SKWS) is interesting.  
ConAgra (CAG) reports earnings this week, and the company has been a consistent performer for decades.  I’d take a look.
On Thursday, Foot Locker and Nike report.  Their earnings could foretell what happens with Under Armour and other apparel retailers like Hanesbrands (HBI) that are on the brink.

The (ugh) Christmas season has investors excited over retail stocks like Macy’s (M) but I’d wait until the final numbers are in before I got too excited.  At the current level, I’d be a seller of M, but that’s just me.  It was appealing at $18.  At $25, it’s a cinch to sell it.

There are lots of mergers and acquisions going on in the media space.  The Disney/Fox merger is huge.  Your Hulu account will change, and if they get Federal approval, it’s a game-changer.  You could look into Discovery Networks (DISCA) as a potential investment and takeover candidate. The stock is under valued, but they have never failed to disappoint.  If you buy, anticipate a merger and/or takeover.  It’s undervalued from a financial standpoint, but stock-wise, it’s a big risk. March forward

Banks.  The new tax plan says that banks will be a promising investment. Pick and choose.  Big banks like JP Morgan, Citibank, and Bank of America are so-called no brainers - which would imply that you have no brain if you invest. On the contrary.  You can also Check out a larger regional like Key (KEY) and Beth Mooney, who runs the joint, is among the best minds in the industry. You could do a lot worse, and not much better.

As for me, I’m looking at Thor Industries (THO), Salesforce (CRM), big banks (XLF) Emerging Markets (EEM) and Skyworks (SKYW) as potential investments, but I’m struggling over what to sell to buy into them.
If you have cash to put to work, those are my recommendations. 

Go forth and multiply.

Sunday, November 26, 2017

So, What Now?

I’m pretty happy with my investment choices - and if you’ve been following along, you would be, too. [Ooops]

The options at this point are:  What to do with Pfizer and Key.  Pfizer pays a dividend in a week, so I’m content to stick with it until then.  For some odd reason, I’ve stuck with it longer than I had anticipated.  Only my investment in Ford was more agonizing.  Key is a great bank, but they are a ... bank, and as such tend to waffle with this goofball that is in the White House and his so-called tax cut - but I digress.

I continue to be long DelTaco (TACO) and would advise you to be, too. They will struggle with costs and the eternal problems of bringing people into their restaurants, but ... people have to eat somewhere, and the stock is priced right, and if you aren’t in already, at the $12 area, you should be.  The management team knows what they’re doing. Ride along. 

It says here, I’m 60 and I’m supposed to be risk averse, but I enjoy the risk.  Hence, my investments in Square, Limelight Networks, and Extreme Networks.  Otherwise, I’d be in stable investments like bonds (yuck) and income stocks, which are only appealing to me if they are growth stocks - which Pfizer doesn’t seem to be at this point. I’m struggling to hang onto this thing.  The part of me that wants to sell it combats the part of me that thinks that their management team will find some way to make this thing a growth vehicle.  But that growth vehicle seems to be a pipe dream, and there is growth to be found elsewhere - which is where Square, Limelight, and Extreme Networks come in.

ACCO Brands is a value stock.  I lose patience with value stocks because the market doesn’t appreciate them, and I can’t wait for “the market” to appreciate something that I already appreciated.  They trade at a lower valuation because they ... well, aren’t valued highly.  That’s the way it goes.  At some point, it will come around for them, but you have to have patience, and patience is something that is growing short for me now.

Square continues to grow at an alarming rate, partially because of their embracing of Bitcoin.  I don’t have time to explain it, and I also don’t have the knowledge of the so-called cryptocurrency to know what the fuck is going on, but suffice it to say that I’m along for the ride.  And, it’s quite a ride.  Get on board. The ticker symbol is SQ.

I’m in a good place, investment-wise - which balances the horrible place I’m in career-wise.  My job is stagnant, and my pension sucks compared with other co-workers who have been with the company a similar amount of time.  It’s the reason I have to make the best of my investments.  My salary stinks compared with people who have been with the company as long as I, and I have to make the best of the time I have left to resuscitate my retirement savings.  It’s pathetic, but true.  I earned so little for so long that I have to make the best of it now.

I try to balance the risk with the reward, and I advise you to, too.  I’ve resisted big-money investments in Amazon, Google, Facebook, and Netflix - although I have found an ETF that contains them and others, so it’s less of a risk.  Ticker symbol FDN.  Find it.  It’s a struggle, finding stuff and keeping up with it all.  It’s a huge stress on my life, and I’d rather not deal with it, but I have to - if I’m going to be able to retire in some sort of comfort.  In my darkest hours, I don’t think I’ll be able to retire at all.  In the long run, I have failed at it, and only now do I realize that my time has been spent in worthless anxiety.  I will struggle to make the best of it.

If it seems that I’ve got the world on a string, it’s not a string so much as it is a yo-yo.  I’m playing catch-up in a world where most of you have already caught up.

Tuesday, November 14, 2017

Random Stuff. Pick and Choose.

Thanksgiving is coming.  No kidding.  What bugs me about it is the choice of food.  We're supposed to eat turkey.  Why?  On account of, because.  It's what we eat.  We make no effort on any other day to cook a giant turkey - other than Thanksgiving. Mostly, people find something to complain about.  It's too dry. It's tough. It's cold (have you ever burned your mouth on Thanksgiving turkey? No). For what?  Here's an idea:  Gather your friends and family, and eat fish, or chicken, or burgers, or ... GOD ... whatever.  Be thankful.  Isn't that the idea?

Our annual company Holiday party is coming. Egad.  I've been there 26 years and have not yet attended one.  I'm not sure what that says about me, other than the idea that I don't like going to parties alone and I don't care to have someone sitting around counting my drinks.  Especially since it's in Atlantic City, and they seem to pick the furthest possible place from everyone to hold a giant dinner/drinking/dancing party.  But, that isn't the issue here.
The issue is that, when sitting around the lunch table with six co-workers, the topic comes up:  Who is going to the Holiday Party?  One person goes around the table, asking by name, if they're going.  Until they run out of names, and mine is the only one left.
Am I supposed to volunteer: "No, I'm not going." Or, is it assumed that, because I am desperately single, that I am not going because I don't have a date?  I assume the latter, and keep my mouth shut until someone changes the subject.  And then, I continue to keep my mouth shut.

We call it the "Holiday Party" because we are supposed to be Politically Correct and stop calling it the Christmas Party.  Today, there was a story on the local news about the "Holiday Tree" being set-up at the Philadelphia Art Museum.  Is it a Holiday Tree?  Which holidays have a tree as a symbol of the holiday?  Kwanza? Hanukkah? Diwali? Nope. Hint:  It's Christmas.  So, why do we insist on calling it a "Holiday Tree" when it is clearly a Christmas Tree?  Stop kidding yourselves, folks and live your life.  

I feel like I should comment on the stock market, because I have made a habit out of it recently.  OK, so here goes:
I love the underdog.  Beaten-down companies whose growth prospects are slim, and their stocks have been killed mercilessly because big-time growth stocks have captured the imagination of investors, and their share prices have escalated beyond what rational thinkers (like me) would consider approachable.  So, it's left to us to find the bottom-fish and ... well, go fishing.  I submit:

DelTaco (TACO). I know I've mentioned this before, but it's a growth stock in a crowded space (casual dining) but the share price is down to nearly a 52-week low, and if you're interested, there is an entry point right here.  As for me, I'm holding, and trying to buy more as finances allow.

Under Armour (UA) A true bottom candidate.  The stock has been clobbered over slow sales and the death of modern retail.  However, if you believe in the brand and Kevin Plank (as I do) you'll find an entry point here at the $11 level, and be patient while the company re-finds its footing and comes back.

General Electric (GE) Hoo-boy. This has been a disaster for the past year.  Buy this, close your eyes and come back in 3 years.  It might take that long to right this ship.  After all, how long does it take to turn an ocean liner?  There is so much work to do here, that it might seem overwhelming, and I suppose that there are either (a) investors who do not want to wait (b) investors who need the dividend, and since it was cut, will find other opportunities or (c) investors who don't see the potential and (a) and (b).  However, if your time horizon is longer than a year or two, I'd suggest dripping money into this, since the share price will likely be in the $16 to $18 range for a while, and you can build a nice position until the rudder manages to steer the giant ship around its obstacles.  The keyword here:  Patience.

Advance Auto Parts (AAP). They had a nice quarter, and guided roughly in line, but the share price is down from $178 to $95 over the year-to-date.  Is that an opportunity? It says here, it is.  The market has overreacted to the "Amazon Effect," in that, they fear that Amazon will do ... well ... everything, including selling auto parts online.  Ask yourself:  If you're doing a repair, and need a belt, are you going to wait a day or two for Amazon to deliver it, or are you going to go to your local AAP store and get one and finish the job?  Sometimes folks, fear takes over rational thought, and you have to be able to find a middle ground.  Amazon will not take over everything ... which leads me to this:

The Amazon Effect:  People hate Walmart.  No doubt.  I have lost Facebook "friends" because I defended Walmart.  It's true.  If you spend any time in the Deep South, you will find out that, if there isn't a Walmart in town, the people have no place to shop. Fact.  Around here, when a Walmart is proposed, people picket because we have so many places to shop, we don't think that another Walmart will help.  That's the problem.

So, why don't those same people hate Amazon?  They might, but there is no place for them to picket. Where are they going to march?  In front of their computer?  No.  They just point and click, and order junk that they get in two days in those smiley boxes.  It sure seems better than having Walmart pay property taxes and give people jobs.  How many people do you know who work for Amazon?  I'll wait.

Meanwhile, the thing they call "Brick and Mortar Retail" is supposedly dying.  OK, maybe, but it might be because we have so many shopping centers that it's impossible to cross the street without finding a place to shop.  It's called saturation.  Sure, stores like Kmart, JC Penny's, and Sears are closing, but think about how many stores from your childhood have closed over the years.  It isn't that odd.  Stores close.  Consumers dictate.
The latest scare is in the consumer drug business. Shares of CVS and Walgreen's (WAG) have struggled because there is speculation that Amazon will go into the retail drug business.  OK, maybe they will, but will that replace the relationship that consumers have with their local pharmacy?

I can't see a day when consumers will want to "point and click" on anything without first touching it and trying it on.  You might buy a pair of shoes or a jacket online, but that's only because you know ahead of time that it will fit.
Retailers are struggling to find ways to make the shopping experience better, and it says here that they will, because people have been around longer than Amazon.  Sure, it's a great convenience to be able to point-and-click, but touching-and-feeling is a great experience, too.  The strong will survive. 

You betcha.  You just have to be able to find the ones who will survive.  Go with quality. Quality always wins.  Whether it's Under Armour, Apple, L Brands, Estee Lauder, Colgate-Palmolive, Newell Brands, Procter and Gamble, Anheuser-Busch, Hanes Brands, CVS, Trip Advisor, Allergan, Discovery ... the list goes on.  As for me, my money (literally) is on Under Armour, only because I believe in the true value aspect, and well ... I love the product.
Will these companies and brands go away, or merely re-invent themselves and keep up with the changing times?  I'm guessing that, as you read this, there is a meeting going on somewhere with the management of these companies deciding how they are going to deal with this "new millennium" of consumers and how they will adapt to their changing habits.

They are trying to figure out how to make us need them more than they need us.  That's what great companies do.

Sunday, November 12, 2017

The Chicago Experience

As a young person in the 1970s, I had a few favorites.  I was enthralled by the prog-rock movement spearheaded by Yes and Emerson, Lake, & Palmer; and my boyhood dreams of being a musician were fueled by the likes of them.  I had a few guitar heroes:  Robert Fripp, Peter Banks, Jan Akkerman among them, but there was one lurking in the background that I didn't acknowledge until later in life.  Terry Kath.

If we go back to the early 1970s (where I come from) the world of pop music was cluttered with nonsense, and even as a youth, I recognized it.  My bus rides to school were dominated by questions like, "Have you heard 'Hocus Pocus' by Focus?" and if you were listening to 92.5FM (WIFI) so that you could hear the "long version" of Yes' "America."'
You have to remember, those were the days when, if you didn't hear something live, you couldn't "YouTube it" or go back to your DVR and re-watch it.  It was a "hear it live or not at all" society.  Hence, The Beatles' epic performances on "The Ed Sullivan Show."  We didn't have reruns.

When the first Chicago Transit Authority album came out in 1969, most of us heard "Beginnings" or "Questions 67 & 68" on pop radio, but there was so much more.  Like "Free Form Guitar," which blew the mind of a 12-year-old and "Listen" and "Poem 58" that never made it to the big-time AM radio stations that we were listening to in those days.

By the time the second Chicago (they had been re-named) album came out, the big deal was the Suite on side two.  We listened to it over and over.  What we neglected were the first four songs, that were mere masterpieces, and I suspect that the band thought so, too.  Only on repeated listenings do they shine over the second side.  Hindsight.
The third album was a pure masterpiece, and the kid was dumbfounded.

Christmas of 1971, this 14-year-old gets "Live at Carnegie Hall" (Chicago IV) as a gift and goes nuts.  I was way too young to have attended a concert, so this was the best I could do. It was many years later that I got to go to Carnegie Hall to see Marc Maron and thought, "So, this is where Chicago played that show?" I was awestruck, and a little goofy I guess.  I pictured the band on that big stage, recording that album and my mind wandered.

By the time Chicago V came out, I was full-on fanboy.  I remember coming home from the record store with the album, and showing it to a gas station attendant who was (obviously) much older and as big a fan.  The album had an insert with a giant poster of each band member, and we looked at it together.  I had the album before he did! As usual, it was amazing. "Saturday in the Park" and "Dialogue" were my favorites, but the entire album was still up to their standards, I thought.

I stayed with them through Chicago VI and VII, but my fandom was beginning to wane.  As with the prog-rock era, the tempo was changing, and my love of the band was still there, but the music was losing touch with me.  We were growing apart.

I don't know how many they are up to now - 35?  It's questionable, and with the loss of Terry, my mind and taste has wandered.
Recently, I watched "The Terry Kath Experience," a beautiful documentary put together by his daughter Michele - expertly, I might add.  The film has re-invigorated my interest in the band and Terry's work, in-particular.

Watching videos of the band has alerted me as to Terry's influence, and his "band leader" experience. As a young person, I never realized.  To a young teenager, it was all about the horns and the overall experience.  To us, Danny Seraphine was a God, and may still be - but the focus of the band was the horns and drums.  Little did we know that the true heart of the outfit was Terry.

Obviously, it's sad that his life ended the way it did, but I have come to realize that he would not have  continued with the band as it evolved.  Perhaps he saw that, and I'd like to think that he did.
The sad part is that we never realized what his music would have been without the horns, as it appears that he would have wanted.  It's interesting to me that the big part of Chicago was the horns, but the lesser part of it to Terry was - no horns.  If you go back and listen to "Poem 58" and "Listen" you can hear what Terry envisioned the band being without the horns.

We can only speculate.  Over what John Lennon would have done, what Jim Morrison would have done.  Jimi Hendrix.  Janis Joplin. Michael Hedges - certainly.  Freddie Mercury. Chris Cornell.  The list goes on ...

Certainly, Terry Kath had much more music in him, and while it's sad that we did not get to hear it, it is joyful that we got to hear what he had in his heart.

Because it lives in our hearts.

Thursday, November 9, 2017

Beat and Raise

“Beat and raise.” Those are the two best words a shareholder can hear out of an earnings report.  That is exactly what Square (SQ) did this week. They beat analyst’s estimates and raised guidance for 2018. For some reason, the stock fell a bit after the report, but once investors heard the conference call, SQ rose another 1.5% to another 52-week high near the $38 mark.

The “payment space,” as Wall Street would call it, is hot.  Paypal (PYPL), Visa (V), and MasterCard (MA) are leaders in the industry, but Square is gaining market share, and working on their banking side, making loans to small businesses and building a customer base that will either make the company a strong independent processor or make it an attractive take-out candidate.  Either way, investors (like me) win.  So far, it’s been a nice ride.

Meanwhile, Pfizer (PFE) struggles along as almost dead money, and while it’s a nice dividend play, at 3.6%, young-at-heart investors (like me) would like to see some growth in addition to the attractive dividend.  I like to refer to “growth and income” as my favorite phrase, and the “income” part speaks to the “growth” part when it comes time to sell - which appears to be closer with Pfizer.  My legendary patience is wearing thin.  Are we a drug stock, an income stock, or a growth company?  My guess is the first two, and that does not feed my desire to speed-up my retirement date.  A 3.6% dividend is nice, but if the share price doesn’t move (which it hasn’t much) then the dividend isn’t as attractive as it would be if the company grew and increased the dividend.  That’s how it is supposed to work.  A dividend yield isn’t supposed to increase due to a share price decrease.  Get it? I do.  It’s time to sell Pfizer.

But what to do with the cash?  Buy more Square? One of my favorites, Del Taco (TACO) is moving toward it’s 52-week low of $11-and-change. Cisco Systems (CSCO) reports in a week. That’s a possibility.  So many choices.

I’ll keep you in the loop.