BAGAKOAA; August 15, 2012 On The Road Again Again

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August/2012

On The Road Again

 

I was awakened this morning after a nice long seven hour sleep. I was excited because I have about 16 portfolios that need balancing and adjustments. The market does not open here until 7:30 am so I had plenty of time, or thought I did.

 

Ya see, now that I am retired I no longer have the padi.com e-mail address. Instead of doing stock stuff, I ended up changing my email in about 23 vendor websites. My new email, if you do not know is brianpaulcronin@gmail.com.

 

Once I was done with that chore my lovely wife was up and so was the parade of fur. (Our dogs.) Dennis wondered over for a bagel and cup of coffee, then we were off to Camper Land. Yes we pulled the trigger on a Jayco Grayhawk 31 FS. Devin was in charge of the negotiations because she has done all the homework.

 

Now Devin needs to work on her negotiation skills a bit. As Zach, our salesman brought us the total, she exclaimed, "That's right at what I said they should be!". So much for negotiating. Then we were headed to the finance department.

 jayco trailer

This is the part that I hate even though this would be a cash deal. You see the last two cars I bought, I made the dealers a deal, give me a fair price and get me out the door in under sixty minutes. BMW did great, 47 minutes. Cadillac took one hour and eleven minutes.

 

Camper Land set a record. Six minutes. I loved it. I wanted to buy another one it was so painless. I was even asking "Aren't you going to try and sell me Lojack? What about the rust under coating? What fun is this sign and leave?" Anyway here is our prize with Jackman standing outside.

 

After having a hearty RV type lunch at Virg's

virgs 

we came home and I was excused to continue working on the portfolios. I enjoyed this a lot. So without further ado, here is the wrap up for the day.

ZZZZZZZ Sideways

 

That about explains the market today. Light trading an virtually no volatility. We called the almost flatlined CPI number correctly. We did get the industrial production number wrong as we were calling for a softer than expected number, but low and behold it came in relatively strong. The Empire State report came back soft so that probably helped temper the good industrial number. We also got the homebuilder index number wrong as it was up.

 

We did call the market flat today and that it was.

 

The boring market allowed us to do some homework and we came upon an interesting find.

 

WPZ, Williams Partners is a master limited partnership that owns the Transco and Northwest natural gas pipelines, has a 49% interest in the Gulfstream pipeline, and runs one of the country's largest midstream natural gas gathering and processing operations, with particular strength in the Marcellus shale. The combination of a core interstate gas transmission system and a liquids-leveraged midstream business has helped Williams Partners maintain significant cash flow growth.

 

The 6% yield got our attention though it did not pass all of our screening criteria. Recently the stock was selling for 59 a share and they issued some more shares that was a 2.8% dilution. The stock came down 5% almost overnight. It is down almost to 51 a share. Morningstar has a fair value of $63 a share giving a nice margin of safety.

 

In reading Morningstar's evaluation, using a discounted cash flow analysis they see a value of 68 dollars a unit (Share) and worst case using a distribution discount model value of 52 a share. We are in at $51.20 long in several portfolios.

 

CAUTION: there are some call options that look attractive. They are roach hotels. You can get in but there is little liquidity so selling them would be marginally successful. If you do the homework and agree there is an upside, we suggest going long.

Salve Lucrum

 

 

 

 

 

 

Brian Ireland
 
 
Since 7/26/2012
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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