Hey guys, originally this was going to be posted yesterday but because Roadrunner decided to crap out as I was writing this, no salami. Actually, not a terrible thing because I’ll just tack on today’s trades as well.
VXX – I sold out of the position Monday night after the rally in imp. volatility (Dubai). Mostly because it seems to be the way of the market to let things settle until the end of the year. And as predicted, Dubai was not nearly as big a scare to put a permanent dent or concern in the market. Turns out to have been a decent exit time since the VXX has sloped downwards the past few days. As I’ve said, I’ll very likely be re-entering this position late December. If this sounds like a trade more than a value pick, keep in mind that the VXX isn’t an actual company, or ETF of commodities/sectors. I’m using it as a pure hedge, so this is the one exception to the rule of trying to get into traders’ heads.
DSX – Increased the position slightly to max it out at 15%, wasn’t able to do so before due to lack of cash but now the portfolio seems to be in the opposite extreme.
ELON – I like this company, I really do. But the uncertainty with so many municipalities running into budget crises has shaken it (at least, that’s the best explanation I can deduce). And that doesn’t seem to be shaping up anytime soon. The smart grid stimulus package notwithstanding I’m very concerned about how the stock seems to be more a trader’s hot potato than anything related to the company. Note just today how the stock dropped $1.02, only to rise $1.02 after hours. So, I took the opportunity tonight to cut the headache and leave it out. Unfortunately, it seems I entered the trade for 11/03 instead of 12/03 so the sell shows up a month back :-/. I’m not sure if I’m going to consider this company again. Given the even higher expected volatility after the year end, probably not. It’s valuation is slippery because it’s basically a growth company currently operating with losses. Would I pick it up again at 9-10 to hold for 5 years? Certainly. But this is the type of company I don’t think will fit particularly well for the Initiative.
TIF – Relating back to the last post where I discussed the new outlook, this is the first buy on it. I feel like I may have written too much emphasis on the commodities/USD on the outlook, because the way I look at it is it’s the icing I’m looking for to find strong companies, if that makes sense. Tiffany’s is a company that I personally like quite a bit (as a stock, not merchandise). It has in some ways the best possible jewelry niche. Think of it this way – Tiffany’s is a brand that a lot of people can and will splurge on, especially as a gift. From that perspective, it’s a luxury brand with broad appeal. On the other hand, it’s not exactly cheap, and for that reason it scales very well in that it’s rare a piece from them won’t be “good enough”. For the company itself, the valuation is definitely not cheap but it’s not expensive either at 20x forward P/E. Bought into it a few days ago, and now with more cash I’m maxing out the position.
