Wednesday, September 23, 2009

Bought 50 WOSCY as LT at $2.3/AT & T/ GRT/ U.S. 2 Year Note Auction/ General Mills/New Zealand GDP and the Kiwi/ SOLD 1/2 ARIA

1. Bought 50 WOSCY as Lottery Ticket at $2.3 (See Disclaimer): Wolseley PLC is a British company that is a leading distributor of building supplies. It operates in the U.S. under the brand name Ferguson. Since the housing downturn, the company has suffered and has closed over 700 branches and reduced its workforce by around 17 thousand. Besides the recession and the downturn in housing, the other major problem is the firm's debt. While I prefer LTs with low or no debt, I will occasionally buy one where debt is a problem and hope the firm continues to take measures to reduce the amount of debt and to cut costs which Wolseley appears to be doing. I read the Morningstar report this morning which was generally favorable long term. Like my recent purchase of Mueller Water and U.S. Concrete, this one is a play on an improving economy and a gradual pick up in new home construction. However, I am not exactly confident about the firm's near term prospects which is why limited my exposure to 50 shares. I was unfamiliar with Wolseley until last night when it came up in a Morningstar screen that uses a large discount to Morningstar's fair value estimate. These shares peaked at over 25 in 2006 and 2007 during the housing boom. WOLSELEY PLC ADS Share Price Chart | WOSCY.PK

2. Cramer High on AT & T (own common and bonds): Cramer claims that the technicians at the believe AT & T has formed a pattern that will take the stock to $30 as the next stop.

3. U.S. Two Year Note Auction: It is almost impossible to believe. The U.S. government saw strong demand yesterday for a record 43 billion dollar sale of two year notes to yield 1.034%. I am just grateful for all of those investors giving their money to Uncle Sam at such an abysmally low rate.Historical Securities Search Results The ten year TIP is scheduled to be auctioned on Monday October 5th. auctions.pdf I have lost my interest in that one, though I did buy some at the last auction which can be done at no cost at my broker. Maybe I will buy 1 ten year TIP bond at this auction in my Roth IRA. The current real yield on a 10 year TIP is around 1.61%, according to

4. Glimcher Realty (own common and preferred as Lottery Tickets): GRT completed its stock offering selling 30,666,687 million shares at $3.75. The last purchase of the common shares was at $1.61: /Buys: GRT & GIVN

5. Brazilian Sovereign Debt (currently exposed to Brazilian Real via BZF) : The next bull market may have its origins in the growing affluence of the population in countries like Brazil, China, and India, possibly joined by the American consumer after a few more years of balance sheet repair. Yesterday, Moody's upgraded Brazilian Sovereign debt to investment grade. Fitch and S & P upgraded Brazil to investment grade last year.

6. New Zealand: The New Zealand economy actually grew slightly in the 2nd quarter with the forecast calling for a contraction of .2% in GDP. New Zealand's current account deficit also fell to the lowest level since 2004. The New Zealand dollar rose against the U.S. currency to $ .726. (i.e. 1 New Zealand equals .726 U.S Dollars or 1 U.S. dollar will buy 1.3761 New Zealand dollars) I have been following this currency since it is generally one of the higher yielding currencies. The current NZ benchmark rate is 2.5%. Wisdomtree has a currency ETF for the New Zealand dollar, symbol BNZ: WisdomTree - WisdomTree Dreyfus New Zealand Dollar Fund (BNZ) I own and prefer owing the Australian Dollar currency ETF, FXA, which has made a bull move against the U.S. currency since the start of the current cyclical stock bull market in March. I have bought the Kiwi however in the past. FXA, BZF and another currency ETF that I own, CEW, are discussed in this recent article in Seeking Alpha.

7. General Mills: Headknocker reamed LB this morning for selling the GL's General Mills shares, and gave the LB a stern five hour lecture about the need to think long term as well as the importance of dividends and probable increases in the dividend over long periods from a company like GIS. General Mills reported profits of $1.28 for its fiscal first quarter, compared to the consensus estimate of $1.03, and raised its full year guidance to $4.4 to $4.45 from $4.2 to $4.25. Heaknocker wanted the LB to look at the tightness of that range for the rest of the day and to think about it. The LB was quiet during the 5 hour lecture but was heard to say later that it was satisfied with taking profits after a quick 10 dollar pop in the shares. Sold Pepsico/ Sold General Mills/

8. Allianz: Allianz is delisting its shares from most exchanges, including the NYSE, and this will impact even the hybrid security AZM. I simply view this act as unfriendly toward the small individual investor. I have no position in Allianz securities.

9. SOLD 1/2 ARIAD: I had exceeded my LT limit by holding 200 ARIA, so I sold the 100 yesterday in my IRA and will keep the 100 in my taxable account.

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