Well I Was Half Right

It was weird week in the market last week, at least looking back and putting the pieces back together with the help of Barron's. We suggested the market would finish up a half a point, and it was actually up 1.2%. While we got quite a few of our European guesses right for the week, we were running about 50% on our domestic economic guesses. Most did better than we suggested. Let's keep us honest by showing the score board.

Monday we had little economic data but I wasted your time by suggesting that Masco might hit a decent buy point as suggested by Mr. Cramer. We said to look for 11.09 or lower this week. WE DO NOT OWN MAS, but it did come precariously close to 11.09 on the 16th when it broke 11.18.

Our call on USHS was fortuitous if you played it. It was up 16.7% this week compared to MAS which wad down 4.6%.

Tuesday we thought the Small Business Optimism survey might come in a little higher than expected driven by recent good retail reports. We suggested a retails sales number of .7% when you back out autos and oil, and we nailed that one but did miss the optimism survey report buy a little bit. To our slight surprise, business inventories did decrease a bit bring decent news to the market. Much to my personal chagrin, Cramer got the call on Zynga correct and it did plummet. We were stopped out by Wednesday morning taking a 7.8% loss. It is back on our watch list. The Empire State report came in stronger than we expected also adding fuel for a continued rally. The two inflation indicators came in right about where we expected and it indicates that inflation is in check. (BUT keep an eye on oil. It's the wild card.).

So the bad news is I missed the guess on the week. The good news is we missed to the down side and the market gave us a bit more than a point to enjoy. 

One of regular readers (Hutch)brought a nice pick to our attention today. TGH Textainer Group Holdings Limited, through its subsidiaries, engages in the purchase, management, leasing, and resale of a fleet of marine cargo containers worldwide. The company leases dry freight containers, as well as special-purpose containers to shipping lines, freight forwarding companies, and the United States military; manages a fleet of containers for and on behalf of the owners; and buys and resells used containers. It operates a fleet of approximately 1.6 million containers. The company was founded in 1979 and is headquartered in Hamilton, Bermuda. Textainer Group Holdings Limited is a subsidiary of Halco Holdings Inc.

We liked all the fundamentals (do not worry about the relatively high debt as that is normal in leasing companies). It has a decent and sustainable dividend at 4+% and IBD gives it a 97 and the chart is sexy. There is a darn near perfect cup and handle (you really should check this out on a two year weekly chart if you want to see a clean pattern) that runs from April 2011 to February 10, 2012. The buy point is 32.60 and the stop is 29.99. We are in even though we might have wanted one more day of accumulation.

There is a green flag flying so that is the time to deploy your cash. TGH has a nice story and a nice set up for a 20% gain over the next few months. DO YOUR HOMEWORK. We OWN TGH and will make it a core holding as we ease into it.

Oh No Not Another Book

Last week we mentioned Jeremy Siegle's book "Stocks For The Long Run" which is a very well researched 365 page explanation as to why stocks are a great long term asset allocation. He researches all the numbers going back to 1802-2006 (The last edition 2008 does not address the last market collapse, but covers all the rest and that collapse would add fodder to his theory.).

What I found interesting in revisiting this book, was his argument for the long term buy and hold (of well researched value based stocks with low P/Es and decent dividends reinvested) strategy. This flys in the face of what I have been doing over the last 3 and half years. Fortunately I have so many portfolios I manage or co-manage, I can find a few where we did not have much trading and those did fair better over the last few years than those accounts where I was fiendishly trading like a mad man. One of his premises is that investors who trade a lot make more mistakes that those who are disciplined and patient. (Think Buffet whose investment time line is-FOREVER). Anyway a great book to reassure you that equities are better bet than Bonds and even Gold over the next 200 years.

The week ahead.

We have a school and market holiday so I have one more day to eek out the secret messages in this weeks Barron's. Alan Abelson wasted a page and half telling us that the market will be better this year because the model on the cover of this years Sports Illustrated Swimsuit issue is American.

After that message it became clear that most of the writer this week are touting cautious optimism on a rally that continues to mover to higher heights.

In this blog in mid 09, we suggested that we will not see sustainable exciting market growth until BOTH Employment and Housing begin to recover. Then and only then will the market see any chance of revisiting 14,000 on the DOW and 1400 in the S&P.

Well, boys and girls, it looks like the market and those running it are paying more attention to those criteria than they are about the inevitable collapse of the Eurozone and the probable debt calamity about to unfold here in the US. So enjoy the party. Keep an eye on the Green Flag and ride the wave.

 Salve Lucrum