Random thoughts about my interests which include (in no particular order) poker, finance & investing, politics, football and whatever else I happen to see that piques my interest

Monday, August 29, 2011

I wonder if that's what he thought

My parents both died fairly early in my life.  My mother when I was a senior in college and my father a few years later.  They never got to meet my wife, hell I didn't know her when my mother died and we were had recently started dating when my father died.  I always thought my father was one of the smartest people I knew, especially about history.  But about a lot of other things too.

I was thinking while in the shower - where I often do my best thinking it seems - and wondering what my kids thought of me.  Do they think I'm as full of it as I often do?  Or do I appear to know all (or most of)  the answers like my father seemed to me.  I sure don't feel like I know much of anything when you come right down to it.  A lot of times I still think I'm a young man, searching for a lot of the right answers.  My dad was 55 when he died.  He seemed so wise.  What did he think when we asked him for advice?  So many times  I wish I could call my mom or dad and ask them about something.  So many times I wish they had met my wife and kids.  I know looking backwards prevents you from looking forwards, but I'm allowed to wish occasionally aren't I?

I guess the recent hurricane that headed up north brought a lot of this up for me.  When I was a kid I would often read these pictorial magazines the Providence Journal put out for after the 1938 hurricane and Hurricane Carol in 1954.  Pictures of flooding and damage during the storms and pictures of the aftermath at my grandparent's place.  They lived in a triple decker - a 3 story home where each floor was a separate apartment, very popular in the Providence, Boston, Worcestor area - in Providence where they had moved when my dad was 2 in 1931.  My grandfather had fought some in WW1 and then had been stationed in Cuba.  While there he had seen a hurricane up close so he had some idea what was happening when it hit.  Well when the eye of the hurricane came over, a number of people thought the storm was over and went outside.  My dad ran out onto the porch to see the mess from the storm but my grandfather knew better and went out there and got him back inside.  Just in a nick of time as it turned out because when the eye passed and the winds howled from the other direction, the old tree next to the house came crashing down and wiped out the porches on all 3 floors on the way down. 

I told some stories from my dad's childhood to my kids while they were growing up but I sure wish my father and mother could have told them the stories instead. 

I was watching a program on tv tonight called Flightmares.  Not a show to watch if you're scared of flying, believe me.  And lets just say I'm not the best flyer around.  Anyway the first story being told is by a survivor of Delta flight 191 into Dallas in 1985.  He was talking about being on the flight, he was assigned to row 15 but as he was a smoker, he asked for a seat in the back where the smokers section was.  Saved his life as all 4 people in row 15 died.  I remember this day well.  It was a Friday in August which can be a busy time for thunderstorms in Texas.  My wife wanted us to meet for dinner after work with her sister at the Black Eyed Pea in Irving, just east of the airport.  At this time, we lived on the west side of DFW airport but worked east of the airport.  So about 5:30 we all got together and sat down to dinner.  It was just starting to rain and the skies were looking pretty ominous. 

As we got served, the skies opened and an intense thunderstorm broke out.  A lot of thunder and lightning, some pretty close by.  A little after 6 we heard this massive BOOM.  Sounded like a lightning strike in the parking lot outside the restaurant.  But we didn't think too much of it and finished our dinner.  About 6:30 we finished dinner and started heading home.  When we got outside, the skies had cleared off and as we looked to the west we could see a column of smoke by the airport and hear sirens all around us.  We headed hom past the north side of the airport as that was where the activity was.   When we got to the north end of the field we could see a plane in pieces in the grass between the runway and highway.  The fence around the airport was flattened and a big water tank had a massive dent in the side.  The tail, scorched but mostly intact,  was near the water tower but pieces of plane were laying a lot further away in the airport. It was a very sobering sight. 

Apparently a microburst - a severe downdraft in many thunderstorms - had caught the jet while landing, forcing it to the ground.  It had hit a field a little north of Highway 114 in front of the airport, bounced back in the air a little then came down crossing the highway crushing a couple of cars and killing a driver on his birthday.  An engine was torn off when it hit a lightpole by the highway which started a fire on the wing.  It then skidded onto the airport grass.  If the water tanks weren't there just inside the fence, the plane probably skids to a stop without too much more damage though there's still a fire to contend with.  But they were there and the left wing smashed into the front tank causing the plane to basically disintegrate.  Before the plane hit the tanks, the tail section had separated from the plane.  Most of the survivors were in that section. 126 of 152 passengers diend as well as 8 of the 11 crew members.

The tail section remained there in the airport grass for at least a week or 2 and that dent in the tank wasn't repaired for quite some time.  I remember seeing it laying there as I went past on my way to and from work.  I drove that route north of the airport to work and back most days as I worked northeast of the airport in Farmers Branch.  My wife worked  southeast of the airport so she usually went on Highway 183 south of the airport.  If we hadn't met up for dinner that night, it's quite possible I would have been over on 114 in front of the airport when the plane crashed.  I'm glad I wasn't.  Everytime I fly, especially when we land, flight 191 comes to mind at some point.  I don't fly too often. 

Saturday, August 27, 2011

A little this and that

Sorry about the dearth of posts and posting material, I just haven't had much to talk about.  Work and the stock market have been my main focus lately, I've been too broke to play poker much except a little online and y'all don't want to hear about that anyway as it's been a series of AA losing to AK off due to a four flush etc.  Everyday I when I get home from work the last thing I want to do is think of a post and write it up.  I don't even have a title for this post, hopefully I'll think of one before the end of writing this one.  I have kept up on my various blog readings and even commented on a few of them.  You lucky souls know who you are. 

Which gets me to the first thing I wanted to mention.  Texting, twitter and the like are causing the death of English as we know it.  Now don't get me wrong, I have no problem with the occasional common abbreviation in a post.  I've used a few myself.  And I also understand that some people use twitter and such alot and it carries over.  But people if you're writing a blog post, try to at least write in a recognized language.  The Poker Grump posted a portion of a blog post from some guy named Tony TBC and when I tried to read the post I had to stop and reread twice just to understand what the guy was saying.  I'm not gonna repost it here nor will I debate the merits of pushing KK into an Ace high flop, but really guys, are we that text and twitter dependent that we can't blog our thoughts in complete sentences?  Far be it from me to be the arbiter of blogging but reading blog posts like that is too hard.  Like reading them in French or Spanish.  I could do that but why, it would take me too long to figure out what the guy is saying.  Unless this guy is the twitter version of e e cummings, I don't get it.  And I really don't want to feel like I'm reading the mind of a guy tweaking on meth. 

After my last post, I felt pretty smart when I went into work the next Monday to see a number of stocks I talked about go up on great news.  National Oilwell Varco (NOV) announced a contract with Brazilian oil giant PBR for $1.5 billion and the stock went up over $3 that day.  Transocean (RIG)announced a merger with Aker Drilling of Norway and was up about $2.  I had talked to my wife that Research in Motion (symbol RIMM - makers of Blackberry phones) needed to think about maybe merging with either Nokia or Motorola Mobility as they are just getting crushed by the both Apple's Iphones and the Android based phones from HTC, Samsung, etc.  I had predicted a few months before that RIMM would see $30/share long before $45/share again.  This was when RIMM was over $38.  RIMM was down under $25 after that.  Monday morning Google announces a merger with Motorola.  I felt so smart and also soooo dumb for not getting any of these stocks before this happened.

Fortunately the market felt my pain.  Down a number of times since then.  RIG was up, down, down some more and I got to pull the trigger on it at $50.60 per share.  Money in the bank I hope.  RIG closed at $53.12 so I'm up about 5% so far.  Oil is going to be tricky to play in the near term I think.  With Libya possibly coming back into production and oil already down from it's summer highs by a fair amount I think the short term trend for oil is down.  If Libya starts producing again.  Not a bad thing by and large as the rest of the economy should do better with lower oil prices.  So now may not be the best time to pick an oil retailer like Exxon Mobil (soon though if the price heads lower) nor to pick a more marginal service company like say Weatherford International.  But NOV and RIG are among the tops in services.  And the companies that order from them think in much longer time frames than 6 months or a year.  Oil fields need to be developed and the lag time on large equipment orders means companies are not going to want to cancel an order and go to the back of the line when oil prices take a down turn. 

Oil prices are still going back up, lower prices now mean people have more to spend on other things besides gas for the cars,  world economies improve,  companies hire more, demand goes up, oil consumption goes back up, oil prices go back up.  I haven't seen too many dinosaurs lately so it's doubtful oil is being created at a rate fast enough to replace what we're using.  Oil prices may go down but unless some new cheap form of energy is presented to us that achieves world wide acceptance quickly, the price of oil is going back up again.  Anyone ready for "To Serve Man"?  There won't be an oil price collapse a la the 1980s, not unless a world wide depression happens soon.   Just don't see that, at least not yet. 

I was kicking myself a little bit after selling some of my holdings in AUY and AUQ and seeing them both go up another $1 per share but then gold prices went through a bit of consolidation and fell almost 200 an ounce which caused all the gold miners to go down with them.  So I don't feel as bad.  Unfortunately they didn't go down enough for me to rebuy and they went up strong the last 2 days.  So I'm glad I bought RIG instead. 

Did anyone catch the finals of American Ninja Warrior on NBC last weekend?  I was surprised to see it on national television but it goes to show how much more mainstream Ninja Warrior has become.  It apparently got good ratings for a Sunday night in the summer show.  I've been watching the original Ninja Warrior for years and always enjoy new ones whenever they come on.  Fascinating to see these guys, some just regular no name people who want to compete in this.  One guy is in the military and has been competing on his vacation for the last few years.  This year he finally made it and got to go to Japan.  Did pretty well there too.  Unfortunately none of the guys went all the way but one got close.  It's just so hard to complete stage 3.  I can't wait for the new Japanese episodes to air on G4TV.

I'm currently watching some High School football on tv while I write.  South Panola Mississippi vs Hoover Alabama.  Hoover is a perennial football power in Alabama and is often nationally ranked by USA Today.  South Panola is nationally ranked this year while Hoover isn't (they are 15th in the southeast rankings) but Hoover is winning right now 3-0.  ESPN is showing a bunch of high school games pitting top programs from different states against each other and sometimes in state rivals against each other.  Last night Armwood HS of Tampa, usually a state powerhouse and ranked 9th nationally this year went to Vegas (without me) and took down Bishop Gorman who was ranked 11th nationally.  I heard on the radio that some of the offshore betting sites were offering lines on these games and Armwood was a 7.5 point dog.  But they've played in few of these games on ESPN before and they took the win.  Looks a bit hot there in Alabama for these games.  They are playing at Hoover who has a pretty big stadium apparently and they just played another game before this one there as well.  I enjoy the games and also watch the refs to see if I can see what they see. 

Wow Hoover has taken the ball all the way from inside their 5 down to Panola's 5.  Almost got to see the Umpire run over on that last play.  Hoover has been moving the ball on a few quick slant passes and they just faked a pass, the umpire stepped up to cover the line of scrimmage and the QB ran into the hole his line created and almost creamed the umpire as did one of the guys chasing him.  That's what I fear most as an umpire.  It's often not the running back, who can see you and avoid you, but the guys chasing him.  They are focused on the runner and might see you at the last second when the runner cuts sharply and they can't.  Or they hit the runner into you and everyone goes down in a heap.  They got pads, I don't.  The other thing that worries me is having someone get blocked into my legs, especially from behind.  That happened to me in one game.  A running play went to my right.  I turned to follow the play and a guy behind me got blocked and fell right across the back of my legs.  At the time my left knee had a partially torn ACL and I spin wrong or plant it sometimes and have it start to buckle.  So as soon as I felt this guy hit my legs I thought "Oh shit there goes the knee."  I didn't feel any pain though when he rolled off.  The head ref stops the game and comes running over as I got up rather shakily and tested my knees.  Surprisingly there wasn't any damage.  I got lucky.  I've seen a few refs not get so lucky, one of them had to go to the hospital. 

Last weekend I went down to Manatee County to do a scrimmage for Bradenton Bayshore high school.  The coach asked for us to send down some refs so he could run scrimmages with his 1st and 2nd teams and get his players ready to work refereed games.  We didn't call it really tight but called all the obvious stuff.  It was HOT even though we started in the morning.  Of course August in Florida is not known as a particularly cool month.  No major issues, though the play was a bit rough and out of sync sometimes but better than I expected.  I banged one kid for a couple of holding calls as he kept getting his hands outside the defender's frame and holding him while blocking.  But no one ran me over, only one play got a little antsy and afterward the coach asked us all to talk to the team and let them know what we saw, which was good to let the kids know what we are looking for and where they need to improve. 

Finally I want to comment on women in poker.  Josie had a post about her recent experiences at Foxwoods and what she had to deal with in her tourney.  I know the Poker Queen has had moments in tourneys as well.  She was surprised when I told her that some guys feel threatened by a woman at the poker table.  Some just cannot deal with losing to a woman and so when they see a woman doing well, they will do anything to get rid of her.  Poker also has its share of angle shooters and it seems Josie ran across one.  The one thing I can tell Josie is to ignore these guys and make them pay at some point.  But don't go out of your way to do that.  You play your normal game, you make them face you when you're comfortable, and you take them out.  I know the wife has been last woman left in a number of tourneys and it seems all the guys are trying to take her out.  It's not all of them I know but all it takes is a couple who always raise your blinds and it feels like all of them are ganging up on you.  The second thing I would have told Josie is that anytime someone feels he needs to yell at you, you get the floor over there and get his ass warned.  And if the first guy you call over won't do it, keep calling guys over until you get someone over who will.  Abusing another player, and yelling is abuse, is not allowed at any decent place I've been to.  I've caught a couple of dealer mistakes myself so I know they happen.  That one was too late to correct by the time it happened if the floor wasn't willing to go to video.  I'd have been royally pissed if it had happened to me as well but short of taking the asshole outside and whipping his ass, hard to do when you're 5 foot nothing weighing a hundred and nothing and hanging with the best college football team in the land.  Oops, got distracted there.  Anyway, outside of being mad and frustrated, the only thing she could have done after that was to go to the floor and tell them she wanted them to review the video on that table and not let that dealer work anything until she got better training.  No consolation to her after the fact I'm sure.  I know one time I did have the Hard Rock go to video to correct an error but that was a table game so there wasn't a tourney clock or anything.

Well enough for now.   Maybe I should post more often so I can have fewer topics to post on at once.  Or maybe not.  Oh one last thing.  I hope all of you up in NY and New England are battening down the hatches for a little blow.  Irene should only be a category 1 when it hits but there will still be a lot of rain, a good bit of wind, some flooding, and the possibility of tornados to boot.  Nothing but fun there.  Everybody watch out.  Amazingly I have never been through a major hurricane even though I've lived in Florida for 24 years now.  Something about the currents and winds and the shape of the state here makes Tampa Bay an unlikely hurricane landfall.  Had a number come close and brush by to the west or hit south of here.  Charley in 2004 was supposed to hit directly on Tampa Bay but took a right turn and hit Ft Myers about 2 hours south of here.  Charley was a strong category 4 hurricane but not a big one in size so we got some wind and rain but nothing worse than tropical storm strength.  And that's what we usually get.  The last big hurricane that actually hit here was in 1921 if you can believe that.  Hell Rhode Island got lambasted in 1938 and 1954 (twice, one at low tide so not bad flooding) and 1985 was fairly strong as well.  Apparently there is more of a chance of being hit by a bad hurricane in New England than in Tampa.  Stay safe up there and stay lucky.

Sunday, August 14, 2011

All this for 1.5%?

Sorry to be talking stocks again but really, what else has been happening this week of greater import?  I mean outside of the judge telling Casey Anthony "No darlin, being in jail does not count toward your probation and you're also not considered to be fulfilling your probation by staying up north and being waited on hand and foot by some Lightbulb guy in Illinois" there really wasn't a lot going on away from the markets.

The market got crushed on Monday losing over 600 points in the Dow.  Tuesday started well with the Dow going up 200 points in the morning prior to the Fed meeting.  After the Fed opened their mouth however, everyone changed their minds apparently and the market started tanking.  By 2:30 its down 200 points.  Seemed like people were expecting Big Ben Bernanke to come out and say something like he was gonna go to the Pres and get another round of Quantitative Easing going to "stimulate" the economy.  Didn't happen.  I think he knows what a hard sell that would be to the American public.  But Wall St has never seen a government handout it couldn't make money from and they were hoping.  Still once the impact of what the Fed talked about sunk in people started to realize the Fed just promised not to raise interest rates for 2 more years.  And they started buying.  And buying.  The market started shooting up and by 3:30 had gone up 300 points from the low and was +100.  But it didn't stop there.  It just kept going up and up.  By 4pm close the Dow was up over 400 points.  In the hour and a half before close it went up over 600 points. 

Wednesday, Mr Hyde returned.  The market started down and just got downer.   Every time I looked it was getting worse.  By lunch the Dow was down over 300 and shoing no signs of stopping.  I've got stocks losing money hand over fist on the down days, making some back on the good days then giving it all back plus some on the next bad day.  I'm kicking myself for not selling out of Sanofi Aventus when it reached 40 a few weeks back.  I was torn then and I'm still torn.  I really do believe this stock gets to 50 in the next 12 months if Europe doesn't completely implode.  If there's another flu scare this winter it could get there even faster as Sanofi makes something like 40 % of the flu vaccines in the world.  And as I sit the stock keeps falling.  I could have sold 2 weeks ago at 40 and bought back in at 32 this week.  But I digress.  While almost all my other stocks are tanking, my gold miners are making money.  The worse the carnage got on Wednesday, the higher gold went, breaking over 1800 and ounce.  I watched 2 of my stocks hitting new yearly highs and decided I'd be a fool not to capture some of that.  So I put in sell orders for both Yamana Gold who I have owned for the past 2+ years and for Aurico Gold who I've had about 6 months.  Sold half of my position in each stock for a very nice profit.  Now I have money to use for some buys if the market tanks again next week.

By the end of Wednesday, the Dow is down another 500+ points.  UGLY.   It's looking like a full blown bear market is coming into play.  Two out of 3 days of minus 500 points or more.  Not looking good at all.  Then Thursday comes along and the market gets into a buying spree.  All day long it goes up.  Just about all of my stocks are up but the gold stocks aren't going up much this day.  Gold is kinda stalling out after the Chicago Board of Options Exchanges decides to raise the margin requirements for traders who buy and sell gold futures contracts.  Gold prices stay about even on Thursday and lose about 30 bucks an ounce on Friday to close out the week at $1755 an ounce.  Both stocks I sold finish a little lower than where I sold at. 

Friday is another good day in the markets though not nearly as big a day as Thursday.  The Dow finishes up about 125 points though many of my stocks do not go up much and my gold stocks are all down a little.  The markets seemed to be taking a little break after the past week plus of yo yo-ing up and down.  By the end of the week the Dow is down 165 points from it's starting place or about 33 points per day on average.  Down just a bit under 1.5%.  But how it got here is really the story.  When you look at it, the market has really been in a downward trend for about a month broken by a few good up days.  Since 7/21, the Dow has given up about 1500 points which is quite a bit and if you take into account the low point it reached on Tuesday, that's over 2000 points. 

My take - I don't think a massive bear market recession like we saw in late 2008 and early 2009 is going to happen.  But people are nervous and the money sloshing around in the system (from QE1 and 2) is chasing two things, returns and safety.  When the economy looks good, money piles into stocks and you see the Dow go up 90% in 2 years.  When things look less good, money flows out of stocks just as quickly as people buy Treasuries, precious metals, or anything else that is going to provide some return without losing them money.  Why else buy a TBill?  The return is less than 1% per annum.  You lose money when you include the inflation.  But your principal is still there.  Buy the wrong stock and even with a dividend you can lose half your investment.  Even most "safe" stocks in a bad market can lose quite a bit.  Take Exxon-Mobil, one of the safest and best run companies in the market.  Between August 1, 2008 and March 5, 2009 it lost 22.5%.  Which beat the actual market return significantly between those dates but that's little solace to the retiree who may need to sell that stock to live on.  So money runs from the "unsafe" stocks and once that starts its almost a self fulfilling prophecy as institutional money managers join in the rout.  No one wants to be the last man standing when money is flying out of something. 

So as I said before, I don't think we have to fear a massive recession this time.  The issues in the markets with toxic debt, over leveraged banks, etc are not still waiting to come down and crush everyone.  But having said that, people are coming to realize the US economy is not growing like they want it to.  And people are nervous and pulling money out to buy safe stuff.  The Fed and the government don't have the tools they had in 2008 to help the economy along.  Of course they probably shouldn't have been helping it like they did already.  Those birds will come home to roost down the road but that's a rant for another post.  Anyway, though the Fed's tools are more limited now, they did use the one tool they did have when they basically said, "Hey, we won't raise interest rates for another 2 years."  Once traders had digested that information they came to realize that would be good for a number of industries like commodities.

What does this mean?  Well I don't expect the American consumer to go completely into a shell though I still don't think you will see the massive spend-a-thon like there was from 2002 - 2007 from people.  But that low interest rate will keep money out there sloshing around and all the money in the system already must lead to higher inflation sometime down the road.  Higher inflation will also lead to a devalued dollar which means the price of all commodities goes up.  So expect higher prices for foodstuffs, metals, steel, iron ore, oil which leads to higher prices for just about everything else down the line.  Stuff I want to invest in are the companies producing them or the companies that support them.  And some of them are now on sale.

You can get premier deepwater driller Transocean (RIG) at a little over 55 - about 10% above their yearly low - with a dividend over 3%.  Or you can wait and see if the market gets pounded again and take a shot at getting it for a lower price.  2 oil producers/sellers that I like are Exxon-Mobil (XOM) and Conoco-Phillips (COP).  Exxon has proven time and again that they know what they're doing in the oil game.  They refuse to panic & buy other companies at the top of the market but will when the market flops and they can get a deal.  Last year they bought out a natural gas producer XTO Energy giving them a huge presence in that field.  They seem to think natural gas is the next great energy field and I'm not gonna argue against them.  Conoco-Phillips announced recently they were going to split their refining business off from their exploration/production company.  The recent downturn in oil prices means you can buy the stock at $66 which is $10 less than when they announced the spin off and get 2 companies when the spin off happens.  Plus a 4% dividend.  Marathon Oil recently did the very same thing and the stock price went up 35% prior to the spin off. 

Oil services are also a good area to bet on the the petroleum industry.  National Oilwell Varco is in my opinion the best in the industry as they design and sell oil rigs plus the equipment on them.  Something like 90% of the oil rigs in the world have some equipment from NOV on them.  Both Brazilian oil giant Petrobras and BP have big new discoveries and will need to order billions of dollars of equipment to drill them.  A lot of that equipment will come from NOV.  Consider that the stock price fell from over 83 to 60 between 7/21 & 8/10 (it came back big to almost 67 now) and that based on their order backlog, there is no reason they won't hit $100 and you can see why I like it.   If you like something cheaper, Weatherford International (WFT) has fallen from the mid 20s to 17 recently.  They aren't as good as NOV but based on their expected earnings for next year, they should get back to the mid to upper 20s.  If you really like to take risks then take a look at Dryships (DRYS).  Dryships is a shipping company, mostly a bulk shipper (iron ore, grains, fertilizer, etc) but has since branched out in 2 areas.  They've got some new tankers with more on the way, and they have a 78% ownership in a company called Ocean Rig which builds deepwater drill ships.  While the bulk shipping segment has been getting killed over the past 3 years, deepwater drilling has been going great guns.  That has been keeping the company profitable.  But the company has a lot of debt and the CEO has no qualms about playing a bit fast and loose with the company funds, especially in dealing with companies of his relatives.  So this is a highly speculative pick.  The company is doing a partial spin off of the Ocean Rig shares in September or October and while you won't get a big piece (approximately 7.4 shares for every 1000 of DRYS owned) you will get a portion.  At $2.72 per share, you are taking some risk but you do get a fair amount of upside I think.

I also think leading gold miner Goldcorp (GG) is a good buy at just under $50 per share though I would buy in slowly.  Gold prices may sag a bit more over the next few weeks and that might let you get GG at $45 or less.  I think mid tier miner Yamana (AUY) is undervalued as it is increasing production at just the right time.  Both produce gold at the lowest cost in the business which gives them a lot of leeway should gold really tumble.  In the crash in 2008 gold fell to $700 an ounce.  These companies both produce at under $450 an ounce so even in a crash these 2 remain profitable.  Even though I sold half of my position in AUY at $15, I still like the stock.  But when you buy in at $4 and $7 a share, you gotta take some money off the table when it more than doubles.  If it falls back under 12 I'll probably buy more shares then.  I also sold off half my shares of Aurico Gold (AUQ) at $13 that I had bought at $7.50.  Again, I love their model, they are really increasing production at just the right time and I expect them to break $20 at some point in the not too distant future but taking profits off the table means I can sit on this stock and wait out any downturns in gold prices secure in the knowledge that I've made back almost all my money on it already. 

I stated in an earlier email that I like South American companies a lot, especially Brazilian and Chilean companies.  Both countries have worked pretty hard to keep their inflation in check by raising interest rates.  It's hurt their economies a bit but they are in far better shape and further along the economic cycle than the developed economies in the US and Europe.  Brazilian airline Gol Linhas Aereas (GOL) has been beaten down pretty bad and announced a not so good quarter recently but its a good company in a good market and when growth starts picking up again in Brazil, it will fly high.  I like their competitor, TAM SA (TAM), even more.  They got beaten down at the same time GOL did and thanks to an untimely downgrade by an analyst at my own company got crushed late last week and earlier this week when the market went down big.  Lost about 30% in 3 days.  But unlike GOL, they came out with a pretty good quarter and came back pretty strong on Thursday and Friday.  They are down about 10% from where they were.  They are set to merge with Lan Airlines (LFL) of Chile pending approval of the Chilean authorities and based on the rate of the merger and the price difference between the airlines, you can pick up a quick 10-15% gain assuming prices don't fall much from here.  As the economy in both countries improves, I'm hoping to see an even better gain as I bought TAM a while ago.  I mentioned Brazilian oil giant Petrobra (PBR) had discovered massive new oil fields off the coast and would be developing them.  I am not a fan of investing in PBR.  They are a good company with a possibly great future but they are a partially state owned company and the government takes a large chunk of money from them every year.  I'm not saying you can't make money with them, you can, but I think there are better ways to invest in oil in Brazil and I'll take the guys who supply PBR over PBR itself. 

Vale SA (VALE) on the other hand is a good play in my opinion.  Vale is one of the worlds largest iron ore miners and mines a lot of other metals such as manganese and copper not to mention coal.  They also are involved in phosphate and potash mining - read fertilizer - and platinum group metals as well.  Finally they recently purchased Bunge Ltd's fertilizer business in Brazil which gives them even more fertilizer exposure and supports another area I like, farming and food production.  Their price is down from 33 to 26.55 which is only 10% above their low for the year and they pay a 4% dividend.  What's not to like there.  I may buy into this stock if we have another big down day. 

I wrote a little about sugar producer Cosan (CZZ) once before and everything I have read recently seems to back up my belief that this is a stock worth getting into.  They reported so-so results last quarter but recently the price of sugar has headed up to new highs and with the sugar harvest in Brazil - the worlds largest sugar exporter - predicted to be 2 to 2.5 million tons less than original predictions, the price CZZ can charge for sugar exports ought to rise substantially.  The Brazilian government is also calling for more sugar to be put into ethanol producton.  Because they are the only sugar exporter from the Southern Hemisphere, they are the only sugar exporter during the summer up here.  Which means no one else will be able to take advantage of any price spikes until October or so.  CZZ recently fell from almost 13 to their yearly low at 9.50 and is only at 10.62 now with a dividend over 2.6%.  Needless to say this is on my watchlist as well.   It might be on my buy list Monday.

I am not big on bank stocks by and large at this time.  Not because there aren't some good banks out there, hell I own shares in my own company who has the 101st largest bank in the US and I've owned Banco Santander (STD is their stock symbol - who the hell decided that would be a good stock symbol to use on the NYSE???) for a while, but because so many big stocks are doing so poorly, all bank stocks are getting tarred with the same brush.  Unless your bank is reporting spectacular numbers, and the banks that are doing well aren't taking the kind of risks necessary to get spectacular numbers, your bank is getting knocked down everytime Bank of America or Citigroup has a bad report.  STD is a Spanish bank with a big presence in Brazil.  Every time bad news about Spanish debt comes out, STD gets knocked down.  A lot of bad news has come out of Spain lately.  Still they pay a good dividend and I'm willing to wait for banks to turn around here.  But if you want to play a bank without the bad European connections, you might want to look at Itau Unibanco (ITUB)

God this post is going on forever.  For those of you still awake (when I start talking stocks the PQ's eyes seem to glaze over so I don't blame you if yours do too.) I want to talk about one more thing.  Foodstuffs are still going up, with the short harvest of sugar and the possible short harvest of corn along with the low stockpiles of both right now, farmers are raking it in.  I mentioned picking stocks of the support companies in the petroleum sector.  Well that also applies here and in mining as well.  So I look at fertilizer producers such as Mozaic (MOS), Potash Corp (POT), Agrium (AGU), equipment manufacturers such as Deere (DE) for farm equipment, Caterpillar  (CAT) for heavy equipment, Joy Global (JOYG) for mining equipment and Cummins (CMI) who supplies engines for a lot of these companies along with many others.  None of them are cheap but compared to their expected earnings they all should do well.  Or wait for dips and see if you can really get a bargain

Well enough boredom for all of you.  I wish I were posting about killing it on the poker tables but I'm a bit on the poor side right now.  There was another thing I wanted to post about but that will be for another time.  Besides this post took me 3 days on and off to write up so that's probably enough to throw out there.  I hope everyone has had a good weekend.  All this must have wore me out, I'm taking a bit of a nap now.  Stay lucky you nuts. 

Tuesday, August 9, 2011

And I thought last week was bad

The Dow plummeted 635 points today.  If last Thursday was ugly, what was today?  Phyllis Diller ugly?  Maybe even Patrick Ewing ugly.  Not quite Jim Plunkett ugly but close.  On a pure points basis, it's the 4th biggest drop in history for the Dow.  On a percentage basis, not nearly as bad.  But still not good at over 5% down.    Some of my stocks really took a beating, down multiple dollars per share.  The only good points were the gold miners who were all up a bit and Cal Maine Foods.  I'm not sure why but that stock was actually up 2% while all the others were getting waylaid.  I hope tomorrow is a rebound day,  because another down day like this and I might as well work till I'm 80

Saturday, August 6, 2011

What an ugly market

Wow was this an ugly week for the stock market.  I'm a little pissed at myself for not taking some profits in a couple of stocks when I had the chance.  But that is another regret for another day.  On Thursday the market started off bad and kept getting worse.  We are watching it go down while we're working and I'm looking at my stocks and they're all down.  Even the gold stocks were getting hit pretty good.  And two others that had been doing pretty well were really down big.  At lunch the Dow is down 300 points and it's not looking good. 

When I got back to my desk after lunch the market had actually come back some with the Dow down around 270 but as the rest of the afternoon wore on it just kept getting worse and worse.  As it got close to market close at 4 the losses accelerated as the Dow went down 350, then 400, then 450.  About 10 minutes before 4pm it hit 500.  I looked at some of my stocks and saw how far down they were.  When I saw how low some were I decided it was time to step in and buy some shares.  So I spent a few thousand and bought shares of Banco Santander, Brigus Gold, Thompson Creek Metals, and New York Community Bank.  I can't see any of them getting too much lower at this point though the way the market fell, it also wouldn't surprise me all that much if one (or more) of them fell further by 20-30% either.  I don't think the problems in the economy are over and the downgrade by S&P on US debt isn't gonna help. 

In thinking about it, I'm a little surprised by the downgrade by S&P.  Not that US debt shouldn't be downgraded at some point.  I mean come on, we've just agreed to increase the national debt by TWO TRILLION DOLLARS!!!  $2,000,000,000,000.00.  Thats a lot of zeros.  If you're gonna spend that much money, why not let all the major Wall St. investment banks fail, let AIG go down the tubes, and hand every man, woman, and child 15K instead.  I guarantee that would have stimulated the economy better than QE1, QE2 and (I'll bet we see QE3 soon).  And while Wachovia, Bank of America, Bear Stearns, Lehman Bros, Merrill Lynch (hopefully Goldman Sachs as well) went under, the regional banks, the smaller home town banks, and the companies that make things for everyone would have boomed.  That also might have allowed so many of the folks who were having mortgage and debt troubles to pay their way out of it too.  Of course let's not be too blind either, some would have used it wisely and paid down debt but the vast majority of those who got in trouble by taking out loans for more than they could pay off would have probably bought a boat or a new car instead of taking care of business.  Which would have helped the economy at least.

Sorry to get side tracked there.  What I was gonna say is the reason I was surprised S&P had the balls to downgrade the US debt is because I think they could still be on the hook for looking the other way when all of the bad mortgage debt was being graded as AAA and taking the money from the creators of these mortgage backed securities while rating them AAA.  No one has ever been charged with any wrong doing there and obviously there was conflict of interest in place.  If the government suddenly comes out and says something like "we must investigate how these bonds were misrated", S&P execs might be on the hook for criminal charges.  So go ahead and embarass the Obama administration, I'm sure no one will sic the Justice Department on you.  It could be just the opportunity for the Obamessiah to remind the sheeple that he's a different cat.   He better do something soon, the only reason he might get re-elected is because the Republican candidates are almost as lame as he is.  His understanding of what it is to be an American is completely skewed to say the least and I don't trust him to run a local post office, never mind the entire government.

Apparently my buying spree was enough to turn the markets around on Friday.  That and an employment report that was better than expected, though not so much better as to create a full blown rally on Friday.  As I said earlier, I still expect there to be more down days, maybe not like Thursday but based on some other things I read, it looks like the economy is slowing pretty hard.  A lot of companies are expressing doubts about earnings for the rest of the year.  They are also unhappy about the uncertain future regarding taxes and the upcoming institution of the mandatory medical care lunacy that was passed last year.  One of the reasons a lot of companies didn't do much hiring over the past year is because the future looks so uncertain to them.  So a number of companies reported record earnings over the past year or 2 but didn't do much hiring because they were afraid of what the future might bring.  3 of the 4 stocks I bought were up, one up nicely.  But after this weekend's downgrade by the S&P I'm figuring the market is gonna take another dump on Monday.

If it doesn't, I'm going to get out of a couple of stocks that have run pretty well for me, hold on to my gold stocks, and other than that just sit on good dividend paying stocks at a good price.  Oh and sell a couple of dogs too.  Stocks, not animals.  Well no poker other than a little online this weekend.  Time to wrap this up.  Hope everyone has a good weekend.  Stay lucky you nuts.

Wednesday, August 3, 2011

I guess I ought to start with a recap of Saturday night's poker tourney.  It was a little bigger tourney, a little over 40 people so it paid 4.  Not that I got overly close to the money but it wasn't from a lack of trying.  The tourney started out so/so for me.  I couldn't draw a decent card to save my life but I did make some good reads and managed to pick up some pots with crap like J7 and 68.  After a bit more than an hour I had not seen any pocket pairs or big aces, in fact my best hand preflop was A8 but I had increased my starting stack from 6K to a little over 7.  I wasn't satisfied but since I hadn't really had a hand I could attack with, I was feeling I had played ok.

A little later I'm one off the button with 4-5 of diamonds.  Loose guy to my right is the only limper so I raise it up.  I figure he has to dump anything but a good hand as he only has a bit over 2K left.  The button to my left calls as does the limper.   Flop is 9-8-5 with all hearts.  It's checked to me and I put in 2/3 pot bet.  Guy on my left thinks hard for a minute and while he's thinking the idiot limper to my right calls for almost all of his chips.  This guy was a twit, not paying attention and betting out of turn.  So the guy to my left folds and the guy on my right is still in.  He might have nothing, he might have a good hand, you can't tell about this guy.  Next card is a black 2.  I put him in for his last hundred.  He makes an unhappy call and flips up 10-8 offsuit.  Calls a raise for almost half his chips with that crap then calls almost all the rest of them with 2nd pair.  I didn't get any river help and I'm down to just over 4500 after losing to the worst player at my table.  Of course he distributed my chips to everyone else at the table for me.  He went out not too long afterwards, again after not paying attention and betting out of turn. 

The PQ got moved to my table right before the break.  She was doing slightly better than I was but had been through a rough start and come back ok.  Maybe she brought me some luck because not long after she sits down I get AQ suited.  What?  And ace with a face card?  I raised it up, got 3 callers and of course flopped nothing.  Gal to my right bets and my cards go into the muck.  After the break I started getting dangerously close to short stacked.  Guy two seats to my right had been playing pretty well, pretty aggressive but had made a couple of misreads that cost him every time he got ahead.  He had raised my big blind a couple of times.  He tried again and this time I pushed all in which was a fair portion of his stack and he showed an ace and let it go.  That got me some much needed chips but unfortunately I was too soon moved to another table when mine broke.

The next table was much more aggressive and I had a hard time getting anything going.  I also had a complete lack of cards.  I didn't panic or do anything stupid and in fact picked a couple of nice spots and pushed all in post flop to steal pots and keep some chips but the cards stayed bad and my stack got shorter.  Finally I checked from the big blind when 3 people limped in with K5.  Flop was K-10-8.  I pushed all in and the big stack said, he was getting the odds and had to call.  No he wasn't getting the right odds, he was only about 20% sitting there with Q8 for bottom pair but of course he hit the Q on the turn and I did not improve and went out 15th.

I went to play a little hold em while my wife continued in the tourney.  She and I had tussled one hand when I was in the big blind.  I was sitting on Q7 of diamonds and checked after PQ and 2 others limped.  Flop was 4-5-6 with one diamond.  It gets checked around to my wife and she lays out a pot sized bet.  I was torn between wanting to call and chase my straight and back door flush draws and folding.  If there were 2 diamonds on the flop I probably call for all my chips but without it I felt I had to lay it down as did everyone else.  PQ had 66 for top set she told me later. 

My luck on the hold em tables was a continuation of the tourney.  I made a few chips up early but then they dribbled out as I got crap after crap hand.  A couple of times I raised only to get multiple callers and no flops.  When the PQ got busted in the tourney in 8th place I was down to about 16 bucks.  She came over and I told her just a few more hands as I was getting short.  Next hand I have Q8 of clubs.  No one raised and I called in the small blind.  Flop was Q 4 2 with 2 clubs.  I lead out for 4 bucks and got 3 callers.  Turn is the king of clubs.  Bingo, finally hit a hand.  I check and one of the guys in late position makes a good sized bet.  I push all in for a little more and get 2 callers.  One guy had 2 pair, the other had a lower flush and I got back to even in that one hand.

To recap, I thought I played pretty well all in all.  I was tight but aggressive when I did get into a hand.  I took good shots at most hands.  I probably made a bad move in raising post flop when I had the 4-5 but I felt it was pretty likely I had the best hand with a pair of 5s at that point.  That started my downfall I suppose but the lack of playable hands in a fast tourney structure really did me in.  I played a little too tight at times I think but part of that was waiting for my hands to turn.  I figured at some point I had to get some cards coming my way and the only way to get that is to still be in the game.  Little did I know that my run of bad cards was going to run through the night.  Oh well.  That's how it goes sometimes.

Not much else is going on around here right now.  Being in the investment banking/brokerage industry I have been watching the stock market taking a major dump.  A number of my stocks got punished pretty good this past week but I'm sure I've mentioned before that I had been getting into some gold stocks.  I thought about it this week as most of them were staying about even and some were going up nicely.  I didn't realize that between my regular and retirement accounts, I had 5 different gold miners.  They were the only ones that didn't get whacked though.   It feels like the stock market and maybe the economy is at a tipping point right now.  Some good news and maybe the economy breaks out and heads to new highs by the end of the year.  That's not too far fetched even after the past week or so as compared to other areas like Europe and even China to some extent, the US is doing pretty good.  But the recent issues with extending the debt ceiling seems to have brought into focus for many people how fragile our economic state is and how much in debt our government is at this time.  Also the debt problems in Europe seem to be spreading, not getting better.  Where does it end?  Will it impact business here?  I'm sure some of the big banks here hold debt for some of the more iffy European countries like Spain and Portugal and Italy.  So it might be a good time to get a bit more defensive with my stock holdings.  I'm gonna look into that tomorrow.  As for tonight, I'm beat.  I'm off to bed.  Maybe my writing will improve tomorrow.  Or I'll win the lottery.  Good night and good luck