Still tired from a late night of blogging, I heard the alarm ringing.  Well I kinda heard the alarm ringing at 5:51 am.  I wear a mask for my Cpap machine as it keeps me from snoring.  I love the device as it makes me look like Darth Vader.  Well maybe Shrek meets Darth Vader. 

The mask has a Velcro strap around the back of the head and some mornings the strap cuts into my Eustachian tube and blocks my hearing.  That is when my alternate alarm kicks in and wakes me.  It is a pleasant sounding voice yelling "BRIAN".  "BRIAN. Shut off the alarm."  Occasionally the verbal cues don't work and my lovely wife will swing the nearest dog at me to wake me.

That was how my day started today.  Up with the dogs, check the market, take quick but nice profit in JCP, go for a swim, ponder the age old question, "Why is there no milk?"  shower, head off to Bruegger's Bagel, read a bit of Vitaliy Katsenelson's Active Value Investing on my Kindle, get into the office, make a few phone calls, take a few phone calls, and then begin editing and publishing our monthly reports from all over the globe for my fascinated fans on our Board of Directors.  That process was only interrupted today by a nice lunch with a fellow exec.  Then after a quick trip home to check on the status of a bid for plantation shutters we had to replace and check the sanity of my lovely wife, it was back to the salt mines at PADI.

By closing time, I was ready to visit my buddy Ben for dinner and was pleased to find him there (Yamma's Sushi, sorry Dave, cheating on you tonight.  Heck you're in DC you would have never known.)  with his wonderful daughter Lauren, future Clemson Coed.  Then we headed to his house so I could see his Ovation Guitar, nice little ax.  I have wanted one since the first time I saw Glen Campbell play one circa 1969.  He played the Balladeer which became the Glen Campbell signature which became the celebrity series. 

We shot some pool and had a glass of wine and I was home by 8:30.  Saw Man Child's new Mac Pro computer as he put 4 hard years on his last Mac.  Then I was ready to start wiggling the finger across this magic keyboard, BUT wait.  Mrs. Cronin needed the computer one minute to look at some kind of invitations.  Z z z z z z z z z z z z

It is now 10.37 and we can start the blog.  Hope you too had a great day.

Oh yeah, Ben heard I was going to take some golf lesson's so he made few notes during his last golf out that he thought might help.  Thouhgt you golfers might appreciate.

Three Minutes of Fun

That was all she wrote.  Yesterday we told you about an idea to squeeze some profit from JCP by shorting the stock and waiting for fund managers and blind casino monkeys to realize the had just spent too much on JCP or had a nice profit in JCP.  Well we did not have to wait too long for the pin action to begin.  We did not get the double like we anticipated and probably should have been more patient, but a 37% gain for 8 minutes investing (6 yesterday and a 2 this morning) works out to a 6,327% return annually. 8 minutes into an hour into 8 hours into 285 days a year do the math.  Anyway we will take it.

From 6:32 am it was down hill.  The Eurozone and the Greecy games being played with the debt had all PIGS scurrying about.  On top of that we missed all of our calls for the day.  We expected the Empire State production report to be positive on the back of supply chain management issues out of Japan and we got that wrong the report and all segments of the report were stinky.  (Financial term for not very good.)  Inflation came in hotter than expected.  The housing numbers sucked.  The industrial production and factory utilization number sucked.  Money headed toward treasuries which brought their yield up a skosh, but enough to suck in money.  As a result the dollar recovered a bit and what USUALLY happens when the dollar recovers (That one is for you Hanna -not Dave- get out the economic book.) oil turned down.  The equation works like the stringer dollar=cheaper commodities, USUALLY.  Money went into gold today so that offsets that argument because gold was up a blip.

Two people asked us to try out the Buffet Value Spread Sheet today.  The wanted to check out KEY KeyCorp operates as a holding company for KeyBank National Association that provides various banking services in the United States. The company's Community Bank segment offers regional banking services, including deposit and investment products; personal finance services and loans comprising residential mortgages, home equity, and installment loans; deposits, investment and credit products, and business advisory services to small businesses; and financial, estate and retirement planning, and asset management services to high-net-worth clients.

The other stock is TGT, Target.  Regular readers know we have been in and out of TGT many times usually making money.

Now remember this spreadsheet we are using was derived (A clever word for stolen.  Well actually we are a paid member in the AAII so it is not stealing.) from an AAII spreadsheet that accompanied an great article about how Warren Buffet analyses value.  Also keep in mind that there are two usually successful strategies for managing a portfolio growth and value.  Our favorite growth discipline comes from William O'Neils CANSLIM method and our value methods do follow Graham/Dodd/Buffet disciplines.

Let's take a look at TGT Target.  We believe that you can guage the performance of the retail sector by watching the lfow of money between WMT and TGT.  When consumer confidence is up you will see a larger segment of the public shift purchases from WMT to TGT and vice versa.  Right now the shift is subtle but is probably in flux again from TGT back to WMT. 

The person asking is a self proclaimed long termer so that shift is not as crucial to some one with a shorter investment horizon.  We will define longer term as more than 24 months.

From looking at all the research we have access to we would peg TGT with a fair value of 58 to 60 a share.  It current value while still in flux and possibly threatened by the current economic stresses is attractive at $46.41.  On the positive side its fashion and home furnishings departments are doing very well according to their last 10Q.  Their array of brand names does create a sizable competitive moat.  More recently their credit card division is improving and write offs are not as big a problem as 14 months ago.  (One of the reasons we bailed the last time.)  Their 5% back program appears to be buying customer loyalty.  On the down side, NEVER turn your back on WMT.  Some of their recent success is generated from their higher end discretionary products, which is threatened in this latest "soft patch".

In a nutshell, TGT is a good buy at this price.  Our suggestion would be to ease into it over a period of five 20% installments until your position is established.  Put a stop in at $40.00.  We know that implies a 20% loss, but this is a long haul investment and it could come down another 10%. 

The Buffet Value SS has future annual return pegged between 9-15%.  Not to shabby considering the 10 year yield is below 3 at the moment.  The Salve Lucrum return goal is 7% this year.  This kind of value puts TGT back on our watch list.

We ran the number for KEY and it is not pretty.  The 10 annual return implies a -27.1 return based on historical EPS growth and an even worse return based upon sustainable growth.  Now a lot of the recent carnage is tied to the repayment of TARP monies.  It looks as though their assets are not to toxic.  The company is trading just below book value.  We do not like the banking sector and even if we made a play in the sector it would not be this bank.  Sorry Aunt Kay.  We would not even throw this dog a bone. 

Salve Lucrum