Risk/Reward Vol 111
THIS IS NOT INVESTMENT OR TAX ADVICE. IT IS A PERSONAL REFLECTION ON INVESTING. RELY ON NOTHING STATED HEREIN.
"Leisure is the time for doing something useful. This leisure the diligent person will obtain, the lazy one never."--quote from Benjamin Franklin
"Stormy days we passed the time away/Sleepin' in some good warm place
Man came along and we gave him a little race/Was that a vigilante man?"--lyrics "Vigilante Man" by Woodie Guthrie
"Yes, I love technology/But not as much as you, you see
But I still love technology/Always and forever"--lyrics "Always and Forever" (The Wedding Song) by Kip Dynamite--Napoleon's brother
"What you gon' do with all that junk/All that junk inside your trunk?"--lyrics "My Humps" by the Black Eyed Peas
With the Dow Index experiencing its worst week of the year on news of an impending Eurozone recession, slowing growth in China and the ever increasing price of oil, one is left to ponder: Is there any asset worth owning that is safe? With the traditional safe haven of government securities either unsafe (municipals) or bearing too low of a yield (10yr. Treasuries paying 2.25%), the answer is decidedly NO. That said, the current state of flux presents great opportunities for profit for those that are diligent, vigilant and technologically adept. Allow me to elaborate.
Example 1--Diligence. Thursday evening while leisurely enjoying the American Idol results show, I reviewed my current holdings using a simple spread sheet available at www.seekingalpha.com and noticed that CHKR, PER and STD, three of my favorite oil and gas trusts, had fallen much more than the market in general. I accessed some recent stories available at SeekingAlpha and the current gossip available through Yahoo.Finance. I determined that the drop was the result of some profit taking, some repositoning into another oil play and general market malaise. I placed a pre market limit order through my on-line Scottrade account for more of each at a deep discount to the closing price. The next day, all three opened lower, but not low enough to meet my limit and then each jumped significantly. I did not prosper in the move, but I was well positioned. Yo, Ben, talk about "doing something useful" with leisure! The entire effort--from review through ordering (which I did the next morning before an early meeting)--took 5 minutes---literally. Diligence made easy by technology.
Example 2--Vigilance. Late last December, I bought the exchange traded debt of Sprint (JZK) below $18 on the news that Sprint's launch of the I-phone was helping it make a turnaround. I rode JZK up to nearly $23 at the close last Friday. While taking a break from a meeting Monday morning, I accessed my Scottrade account, noticed that JZK was falling precipitously, clicked on news stories, learned that a leading market analyst was questioning Spint's solvency, decided to sell, clicked the TRADE button and sold at above $21 (it fell much more throughout the day and week). I did all of this from my I-phone in less than 3 minutes. Vigilance made easy by technology.
Now I realize that I left the fringe many years ago and am now a full time resident of Lunatic-ville. But that doesn't mean you cannot learn a lesson or two from the insane--people like me and Kip, Napoleon Dynamite's brother. We both love technology--"always and forever". Even if you don't love technology, in today's world you need to embrace it just to get along--like embracing that aunt who had scratchy hair or smelled like cigarettes or wore too much perfume. Some things you just got to do. Get an I-phone and ask a six year old (or the E-Trade baby) how to download all the free apps you need to make life easy.
Despite pull backs endemic to the market in general, banks stocks continue to attract me. JPM is up nearly 10% since I bought it on March 13, 2012, and it carries a decent dividend. BAC's road to recovery will undoubtedly be rocky, but I see it as a big gainer over time.
With yields in many sectors continuning to fall, money has flooded into the "trunks" of junk bond exchange traded funds like JNK and HYG with the predictible result of lowering yields in this space. I like high yield bonds and senior loans but prefer to access them through closed end funds because of their use of leverage. Do your own research on these at www.cefconnect.com .
In closing, I urge you, again, to sharpen your technology skills--something the internet and the tools that access it (e.g. the I-phone) make easier each day. Remember what Kip's brother Napoleon Dynamite said:
"Girls only want boyfriends who have great skills--like nunchuku skills, bow hunting skills, and computer (hacking) skills."
No comments:
Post a Comment