The clock is ticking away the time before the year ends and I have only begun to sort out the possibilities. In Part 1 of this series, I discussed breaking up my potential picks into three categories: contender, on the fence, and out of the running until the 10 stocks have been identified.
Four contenders have been considered so far: American Eagle Outfitters (AEO), Anadarko Petroleum (APC), Anglo American ADR (AAUKY) and Diageo plc (DEO).
Six more are included in today's review: EZCorp Inc. (EZPW), General Electric Company (GE), Wells Fargo & Company (WFC), Annaly Capital Management ( NLY), Intuitive Surgical Inc (ISRG) plus Berkshire Hathaway (BRK.B). These include the remaining five from 2009 and one more familiar to most investors.
There are only seven weeks left in the year, so it is time to start thinking about 2010. If you have been keeping up with my 2009 picks (see: Chasing Value: 2009 blazing picks -- Q3 review ) than you would be aware that the group is up 40% through the third quarter.
This year I bought all of my picks so that I would be riding in the same ship as anyone that might have considered my suggestions.
I will be breaking up my potential picks into three categories; contender, on the fence, and out of the running, until I finalize the list in the last week of the year.
The market continues to befuddle the bears as the third quarter earnings and stock prices continued to move in a positive direction.
During this period Washington has taken charge of the auto industry and helped prop it up with the "cash-for-clunkers" program. They continue to subsidize the real estate market with first-time home buyers incentives, and very low interest rates. The banks are being refueled by the Federal Reserve with interest rates as low as zero, while all the time currency stability has been sacrificed. This has driven gold prices to new highs.
This is the third review of my 2009 stock picks through September 30 (see: Chasing Value: 9 picks for 2009 -- APC, GE, ISRG, WFC and more). This years picks have annihilated index comparisons, so much so that I must attribute some of my good fortune to luck. However, I do believe the original reasoning was sound and the outlier nature of the gains certainly a result of an oversold market living in fear.
In sharing my adventures and opinions in the investment world I try very hard to be candid without crossing the line into being a promoter. That said, I have been buying stock regularly over the last 12 months and buying on fear has paid off handsomely. As the market has catapulted upward since March the opportunities have diminished. However, I did add PSEC in the last month.
They say you should not look a gift horse in the mouth. Sorry folks, sometimes you do. In the case of the recently catapulting Newcastle Investment Corp. (NYSE: NCT), which I bought at 60 cents a share, I am.
I have been following this company for a while and have both made and lost money. Although it started out as a penny stock for me it has jumped over 150% in a week and closed today at $3.61 up $0.39 (12.11%) -- for a total gain to date of 502%. So why am I complaining?
Yesterday my 2009 portfolio closed up 201% for the year. It has been an interesting journey, and while it is rather self congratulatory to discuss it, there are lessons to be learned.
Before I review some of the reasons I was able to do this I want to make it clear that I do not think this can be easily repeated; I look at the portfolio every day thinking this is too good to be true, and we all know what that usually means.
Some of the venom spewed at General Electric Company (NYSE: GE) every time I write about it, is getting kind of old. I understand the criticism of Jeffrey Immelt, the CEO who takes the blame for everything that is wrong with the company and the economy.
I too have felt that he might have done more. In particular, while I argued Monday that most of the companies divisions were well integrated, or at least related, I am not sure that entertainment has to be a part of the mix, and the company is on the record to jettison the appliance division already.
In considering the plight of the GE shareholder, myself included, what exactly is it that investors would like Immelt to do?
While I'm chasing value, General Electric (NYSE: GE) is chasing revenue from water projects. It may not amount to much now, but GE is betting it will be huge some day and it has been working towards this goal for many years.
Although GE had estimated 2009 revenue of $2.5 billion from the water business, that is only a meager 1.6% of the $156 billion in worldwide sales generated by its major business divisions that the world's largest maker of jet engines and electricity-producing turbines is expected to generate this year.
Perhaps EZCorp (NASDAQ: EZPW) will have to create a section for surfboards and snakebite kits to accommodate the customers they hope to gain in Australia by investing in pawn shop operators, Cash Converters International Ltd.
The Texas based pawn shop and check cashing company invested $45 million for a 30% stake in the Cash Converters getting two seats on the board and making a grand leap half way around the world. Just last year they bought outright a Mexican company, expanding their North American operations.
Last December EZCorp was included on my list of nine suggestions for 2009. Since that time it has remained one of the two laggards. I still believe in the company that continues to expand, using its own cash as it maintains a very low level of debt.
Anybody reading Bloggingstocks.com for any length of time will know that I have been following Intuitive Surgical, Inc. (NASDAQ: ISRG) since its beginning.
Yesterday the company reported strong top and bottom line growth, with profits of $1.62 per share, about 37 cents ahead of analyst estimates, and its revenue of $260.6 million was $30.6 million greater than expected. Intuitive also raised its forecast for procedures performed using da Vinci systems, which can lead to increased sales.
"The move by China Investment Corp, which manages $200bn of the country's $2,132bn in foreign exchange reserves, makes the fund the UK-based groups' ninth-largest investor."
The second quarter is now behind us and for the most part it was a positive one in terms of the market pushing higher almost 40%. This is the second review of my 2009 stock picks through June 30 (see: Chasing Value: 9 picks for 2009 -- APC, GE, ISRG, WFC and more). There was a lot of talk about green shoots this past quarter as Wall Street was looking for any small bit of optimistic data to support the market.
The federal printing presses continued to run at full speed pushing the dollar lower and oil prices higher. While the feds were printing money to cover their deficits, the States do not have that same luxury and many of them are having trouble balancing their budgets to the tune of billions of dollars.
This is a continuation of a theme I have been writing about this year involving stock options referred to as naked puts.
This allows investors to take a position in a stock, most often below its current price, but depending on market sentiment. That sentiment remains relatively negative so the spreads are attractive.
I have been following BHP Billiton Ltd ADR (NYSE: BHP) the largest mining company in the world, with headquarters in Australia, for a while but I do not own the stock today. I view all mining companies as an opportunity because I think the diversified raw materials they control are the best hedge against inflation. I do not think inflation is imminent, but with the extreme increases in money supply and debt being created I do not think it will be avoidable a few years out.
For those of you who are able to trade options, I have been writing more and more about naked puts, "selling to open" stock options that I have been doing all year with great returns due to an overabundance of fear.
Let me start with United Parcel Service Inc. (NYSE: UPS), a company with a great balance sheet, strong management, and trading 29% off its 52-week high, about where I sold it last year. I bought it earlier this year at the bargain basement price of $44, and now wished I had bought more.
At the time I had noticed that GE naked puts, a "sell to open" put option, would pay me, on the spot, 52 cents a share if I would commit to buying the shares if they dropped below $2.50 by January 2011. This meant that my break-even position was $1.98 a share when GE was selling for five times that.
The clock is ticking away the time before the year ends and I have only begun to sort out the possibilities. In Part 1 of this series, I discussed breaking up my potential picks into three categories: contender, on the fence, and out of the running until the 10 stocks have been identified.
There are only seven weeks left in the year, so it is time to start thinking about 2010. If you have been keeping up with my 2009 picks (see: 
The market continues to befuddle the bears as the third quarter earnings and stock prices continued to move in a positive direction. 
When you run across a stock with a 16% yield you at least have to check out the story. 
They say you should not look a gift horse in the mouth. Sorry folks, sometimes you do. In the case of the recently catapulting 
Yesterday my 2009 portfolio closed up 201% for the year. It has been an interesting journey, and while it is rather self congratulatory to discuss it, there are lessons to be learned.
Some of the venom spewed at 
While I'm chasing value, 
Perhaps 
It was announced today that 
The second quarter is now behind us and for the most part it was a positive one in terms of the market pushing higher almost 40%. This is the second review of my 2009 stock picks through June 30 (see: 
For those of you who are able to trade options, I have been writing more and more about 
This week I closed out an option on 
Closing Bell: Can't go up every day (BAC, HE, HPW, COMS, BRCD, WMT, AMD)
Wal-Mart grows profit and cash flow in Q3, but comps still ailing
Chasing Value: Ten stocks for 2010 -- Part 2
