Thursday, April 30, 2009

RB's Coup D'Etat on 3/3/MET/NYX?/Copper Prices, Sanofi Upgrade/CB/

April was another good month. With one a little better in May, I may successfully work my way back to October 2007, but I still do not care much for running this hard uphill to get back to my start position. The Nasdaq was up 12.3% for the month with the S & P gaining 9.4%.

A temporary compromise was reached late today. LB would give RB a kudo on the vision thing or whatever moved it to buy stock in early March. In return, RB agreed to refrain from calling LB a tyrant for the remainder of the week. Instead, RB will use the phrase "Our Great Leader" to describe LB.

J P Morgan did upgrade the French pharmaceutical company, Sanofi, to overweight today. The stock went ex dividend a fews days ago. I also believe that Nestle just went ex dividend, based on the data provided at Marketwatch. NSRGY Stock Price I own both Nestle and Sanofi, both recent additions.

The July price for Copper is currently over $2. When I last mentioned the price in connection with the small lottery ticket purchase of Taseko Mines, it was hovering at the $1.5 level. An improving price for cooper is viewed as a positive sign for an economic recovery. More on GE/Merrill Lynch Bonuses/Barron's Roundtable/More on AEB/add of TGB in IRA/tax law changes: property taxes

The only good reason for keeping EHL, a first mortgage bond issued by the electric utility Entergy Louisiana, a subsidiary of ETR, is that I might be wrong about inflation. This bond is now selling at over par, and I could have sold it today easily for a price in excess of its par value after brokerage commissions. This bond now looks good to me only if I am wrong about inflation. In a deflation or nominal inflation scenario, the real after inflation adjusted return of a 7.4% coupon looks good. It will get whacked in a period of worrisome inflation. This will be one of the first long bonds to go once I actually start to see inflation creeping back. Notable News 10 22 2008 & END OF DAY TRADES (IR, INTC, TE AND EHL)
I am certain that I can not predict the future, and certainly can not do it with a high level of certainty. So, sometimes it is best to lay the foundation for alternative scenarios.

I read an article in Barron's online that Sandler O'Neill raised Chubb (CB) to a buy but kept its $46 price target. I would just add a comment. Telling me now that a financial company sells at some percentage above or below book value is meaningless to me. What exactly was the book value of Lehman or Bear Stearns before they collapsed? I am however inclined to add a starter position in Chubb at below $40. Sold Part of IR/Sold FRPRJ: Transfer of Risk to IRA/Bought PJL/FBI Interrogator Comments on Torture/ GR, WBS, CB & MSFT
I am more inclined to do because I currently have no exposure to property and casualty companies now with any type of security. Chubb closed down 3.54% today to $38.95.
The MetLife results for the first quarter were ugly. Yahoo! Finance
My position is limited to its floating rate preferred issue, METPRA, and this report would not cause me to exit that position. The company had operating earnings of 20 cents a share, which was below the 34 cent per share consensus estimate. Met had a net loss of 574 million or 71 cents a share due to investment losses in its investment portfolio. The Company said that it had ample liquidity and a "strong excess cash position" MET has not applied for TARP funds. METPRA is an equity preferred issue that pays quarterly dividends, and the next ex date should be in June.

NYSE Euronext, a position added in early March, reported better than expected earnings of 40 cents on a GAAP basis, 43 cents Non-GAAP, down from 87 cents a year ago. Yahoo! Finance The results were reported before the market opened today, and LB was not impressed. The shares rose almost 3% to $23.17. RB bought them at $14.76 on 3/6 apparently some kind of contest with Cramer which seemed silly to LB at the time. Buys of JWF KSA DIS and NYX/SOLD Entire Position in TFI/ Just a Day of Ignoring My Own Rules

When RB bought Disney at $15.49, it was selling then at below book value. Subsequently, J P Morgan downgraded DIS to neutral and lowered its target to $21. March Unemployment at 8.5%/ Sold Adobe/Allscripts/ USO and Contango/CXW DIS BMY/ I was critical of that downgrade in the above linked post. That downgrade was bad enough but I really took more exception to the downgrade of DIS by the analyst at Pali who downgraded it to sell on March 11. He was featured on Fast Money to give his spin. Buy of HNZ at 31.67/Tax Advantages of Equity Preferred Dividends/Foreclosure Acceleration/Disney Downgrade by Pali/Cap & Trade/NADX Disney rose 89 cents today to $21.9 and closed March 11 at $16.59Yahoo! Finance Maybe the guy from Pali should send me an email, the address is on my profile page, and let me know whether I should sell those shares bought at $15.49 on 3/6/09 at $22 tomorrow. Why would you recommend selling a stock of Disney's quality after it had plunged to a price prevalent in 1994 and 2002, and even below its book value?WALT DISNEY-DISNEY C Share Price Chart | DIS - Yahoo! Finance

LB has cut RB loose with a chunk of change representing the accumulated cash flow from dividends and interest since invocation of the 815 rule as specified in this post from late February that reeks of LB's caution. Time to Hunker Down This is why RB had to do the coup d' etat on 3/3 and don't believe a word on that subject from LB. You can see for yourself that LB was scared witless. RB was ready to roll, always ready, and saved the day once again.

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