BAGAKOAA; 29 February 2012 Follow The Bouncing Bernanke

Post 601 CLICK HERE To See Past PostsFebruary/2012
 No I did not publish last night. It was a long crazy day. We had to head to beautiful Santa Ana, CA for a legal proceeding involving the great flood of December 2010. It was in a beautiful office complex on the 16th floor. We could see the sparkling dusting of snow on Saddleback Mountain. While we waited to meet with our mediator we had access to some very adequate coffee, bananas, and M&Ms. Many of us were impressed with the nice spread. I was doing some calculating and determined that each M&M was probably costing us about $329, the bananas were about $438 each and the coffee was an affordable $63 a cup.
 

While the attorney's and mediator pontificated about a bunch of stuff I can't tell you about, (Because you would be so bored that you would sue me for cruel and unusual punishment.) I patiently read my Kindle version of the WSJ and IBD. We prematurely wrapped up before lunch and some were disappointed that we did not get to enjoy the 87 dollar burritos.

 

I made it back to the office to clean up a few e-mails and prepare for a delightful meeting we were having today. Then I headed 46 miles North East to a town called San Dimas. One of our readers and friend Mike Ameel's Mother passed on Ash Wednesday, I had the honor of attending the wake and Rosary last night.

 

I had arrived a bit early and in need of a loo, and spotted what I thought was a family type pizza parlor. I walked in the place to order a diet Coke and use the bathroom. As I got about 10 feet from the bar, I realized I was in a biker hang out. There was leather, chains, and tattoos as far as the eye could see. There I was dressed in nice wool slacks and an uppity labled sports coat that just shouted COP! Or ATTORNEY!

 

Quickly I spotted an open seat at the bar. All eyes were on me as I ordered. "I'll have a diet Coke, and buy my friends a round." Suddenly I had made 11 new friends. They loved my car and had watched me pull up. The big guy asked me what I was doing there in them parts. I told them where I was going and most of them knew Holy Mary Church and said it was beautiful. After turning down several offers to get a tattoo, and turning down Lizz's (Biker Chick number 2) repeated request to go to the viewing with me for a ride in my car, I made it too the church for the very nice ceremony.

 

But my night was not over. I got in the car and resisted the urge to hang with my new found biker friends, and drove all the way back to our neck of the woods to Friends where it was Karaoke Night. Well it was supposed to be Karaoke Night. Erin, the Karaoke DJ finally got the equipment set up by 9:40 (way past my creative posting time). By then I had had two Corona lights. (I am not a beer drinker but the biker life had rubbed off on me.) Finally, I got a look at the song list and chose Rubberneckin and Johnny B Goode. The place was empty so I was singing to the bar tender and one of our readers who prefers to remain nameless in this blog. It was kinda a said. There I was singing to an empty room with one guy and bar tender. So that is why I did not post last night.

 

Today we had a marathon meeting, playing with one of the worlds largest spread sheets. It was really kinda cool because you could screw with numbers on worksheet 43 and it would roll up 43 pages to the summary page and change 16 different cells on the summary page. I am making it sound a lot more fun than it was, I assure you. But you got these cool formulas like: SUM((L2:QQ10="Fax"-R23*b8))*(BB219:BC110="Brown")*(CC2:CL109)) Told you it was fun.

 

On of the people in the room is new reader. Welcome Colin, hope you enjoy the fun. He makes reader 51 (sorry I told him he was 50, but someone joined this week by signing up for the newsletter.) I can not tell who it either? I am hesitant to say this, but Pimm Fox from Bloomberg just followed me on Twitter about a week ago and I am thinking it might be him. If so, Hey Pimm and love Taking Stock, keep up the good work.

 

 

When we all got home, Devin and I enjoyed dinner from the local Italiano joint, San Gs. I had a two finger pour of Single Malt and Devin enjoyed some Grgich Hills Fume Blanc. While we were cleaning the kitchen, Devin discovered I had left a one finger pour of single malt. Usually Devin enjoys her scotch on the rocks. Tonight she wanted it neat.

Interesting day in the market today. Due to my previous engagement during most of the day, I made the time to drop a note to the Salve Lucrum Portfolio Family (People's whose accounts I directly or indirectly manage.) and it was a decent summary of what happened today.

 

Boys And Girls;

 

The market started out happy today with a hugely successful European Bond float actually over subscribing the Long Term Refinancing Operation (LTRO).  Then it got happier on more good economic news.  (GDP, Personal Consumption, GDP Price Index, Chicago Purchasing Managers Index, to name a few.)  The mortgage app number came in a bit light.  But the Fed's Beige book told many anecdotal stories about a modestly improving economy.

 

Unfortunately, traders were more disappointed by the Mortgage App number than all the other good news.  The market came down in heavy volume.  That boys and girls is called a distribution day.  We have not had one some time.  The other main reason for the drop was Bernanke's comments today as he has shifted his tone from "there may be some more quantitative easing in the works and interest rates will remain low for the next two years" to " the current rates are based upon what we know now" and "there does not seemed to be an urgent need for more quantitative easing." 

 

All of that meant that the market was down about a half a point.  Our big stinger today was Gold.  Because of the Bernanke statements, and the positive news in the economy (as well as the successful bond float in Europe), it kicked out one of the three legs of gold's pricing elements.

(Remember Demand, Speculation, and Currency Fluctuations.)  Today's news got some of the speculators out of the market.  Gold took a 4% hit today and some of our Options stopped out with 15% losses.  Ironically they were up 19% yesterday so that means the 4% price swing caused a 24% drop in the options.  (OPTIONS AIN'T FOR EVERYBODY)

 

As far as CORE holdings with moves deviating from the market swing today.

 

AAPL was up 1.3% even though the NASDAQ was down .67%, an unusual anomaly.  That may have a lot to do with the announcement of AAPL entering the 500 Billion club.  Their market cap now exceeds that magic number.  Or it could be some the cool media leaks about the new iPad due out next month.

XOM was down a tad more than the overall market, but that has to do with a drop in oil prices.  The options we sold on XOM are out of danger now of being called away because the stock has retreated.  It look like we can keep the option premium. 

 

UNFI beat the market today, but we can not see why?

 

MGRC was down today beyond the market drop.  They reported earnings after the close and after hour trading was up to 32.01.  2012 guidance looks up, so we can not explain the 1.92% drop.  More homework.

 

My suggestion would be to look at the anomalies and identify buying opportunities.  (XOM and MGRC).  Today's action will probably generate one more distribution day for the NYSE, S&P 500, and The Nasdaq making the tally 4, 3, 1.  If the NYSE hits 5, we will see The Yellow Flag.  That will indicate time to consider taking some profit and put your buying on hold until we get a clean sell (Red Flag) indicator or a couple of distribution days drop off.

 

Drop me a note if you have any questions.

 

Brian

    

 Salve Lucrum  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Brian Ireland
Since 12/21/2011
BAGAKOAA;

I am not a professional investment advisor. Anybody reading my blog and investing accordingly must be out of their minds. I have made more money than I have lost. There are many more qualified people than I to actually tell you how to invest your money.

BAGAKOAA=Boys And Girls And Kids Of All Ages

Salve Lucrum=Latin for Hurrah for Profit.

2012 Year Ending

Dow 13,073

S&P 500 1,358

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