The LB thanked Headknocker for showing confidence in the mind numbing analytical and rational framework that the LB brings to trading here at HQ. Unfortunately, The Old Geezer has created another mess that has to be cleaned up. While OG was sent back to the Old Folks home before selling every stock owned by the Headknocker, the OG has unfortunately increased the capital in money market funds to clearly excessive levels with no plan for deploying those funds currently earning nothing. Plans and focus are not exactly in the OG's repertoire. LB's trading rules for an Unstable Vix Pattern in a long term secular bear market does require a 30% allocation to cash, but the OG has significantly increased in the past two weeks that allocation with its anxiety driven selling, the LB purred. And, to prove that it will keep a commitment, and is generous to a fault with the RB, LB opened the trading day by allowing the RB to make the first transaction in this new era of cooperation at HQ, and will even allow the RB to explain its rationale for the purchase.
1. Bought 100 shares of Yahoo at $15.95 (see Disclaimer): The RB thought that the bald guy, Oscar Schafer, made a good case for buying Yahoo. Barrons.com And, the RB is not saying that just because Headknocker lacks an abundance of hair. Actually, RB just like blondes. And isn't Carol Bartz more pleasing to look at than Jerry Yang? RB wants to watch more FOX news particularly those comedy shows with the blondes. On the downside, the RB does not like the color purple but understands that the cool guys who founded Yahoo wanted to show non-conformity by choosing that ugly color. The RB wants to wake everyone up to watch Jenna Lee on the Fox Business channel at 4 a.m. The RB is the real star here at HQ, who after all saved the day with a coup d'etat at the trading desk in March 2009-the RB of course, as the LB was shivering under the sheets calling for its mama. Did Right Brain Call the Bottom? RB's Coup D'Etat on 3/3 Bought Nestle Late Today/
That's enough gibberish, the LB ordered the RB to shut up before it embarrasses Headknocker even more than it already has. The LB will impose logic and order, chaos only appears to exist.
Carol at least appears to be on the right path, which is a big change for Yahoo. Carol told an audience in Singapore that she intended to triple Yahoo's operating margin to 15 to 20% in the next three years, and to expand Yahoo's business in emerging markets. Reuters
LB notes that the RB is responsible for this buy, and even the way that it was done. RB placed a limit order to buy at $16.05 before the market opened which became a market order when the opening price was $15.95.
2. Provident Energy Trust (owned): This Canadian Energy trust reported third quarter results that were adversely impacted by weak natural gas prices. PVX did confirm a monthly distribution of 6 Canadian cents for November. Consolidated funds from operations fell to 21 cents in the third quarter from 55 cents in the year ago quarter, due to weak commodity prices, declines in oil and gas production and a lower demand for natural gas liquids. PVX issued downside guidance for 2009 adjusted EBITDA for its midstream operations and downside guidance for oil and gas production. PVX is a weak hold. My last buy was at $5.39 last October: INZ AND PVX I did refer to it as hapless not long ago, and maybe that is somewhat unfair. PVX/Ideologues Rarely See What is in Front of Them/
I have not bought any Canadian energy trusts this year. As explained in several posts, I am waiting to see how these companies are configured after the tax change in 2011. Canadian Energy Trusts/ TOP TWELVE CAUSES OF THE NOT SO GREAT DEPRESSION
3. Roubini On the Creation of the Next Monster Asset Bubble: In Robert Samuelson's Newsweek column there is a good summary of Nouriel Roubini's arguments that the FED and other central banks are fueling a new massive asset bubble with cheap money. Samuelson makes a few good arguments in response but does not dismiss the warning as invalid.
4. Macy's (own senior bond only): Macy's, Inc. reported a loss in the third quarter of 8 cents, or 3 cents excluding items, on a 3.9% revenue decline to 5.277 billion. The retailer expects a decline in same store sales for the 4th quarter in the range of 1 to 2 percent. The company increased its guidance for the year to $1 to $1,05, excluding items, from its prior guidance of 70 to 80 cents. The guidance for the 4th quarter earnings per share was given at $1 to $1.05, and this was below the current consensus forecast of $1.17. Some will be disappointed by the guidance, and the common shares may decline in trading as a consequence. I am fine witht he report as a bondholder.
5. Bought 50 of the ETF PIQ at $19.81 (see disclaimer): The Old Geezer apparently bought 50 shares of this ETF without telling anyone. So the LB, trying to deploy some of the cash raised by the OG, bought the other 50 to round the lot up to 100 shares. PIQ is a relatively high cost ETF from Powershares called the Dynamic MagniQuant Portfolio. Dynamic MagniQuant Portfolio - PIQ This "smart" index attempts to identify 200 stocks out of 2000 based on quantitative analysis. The current expense cap is .6%. This is a link to the current holdings: PIQ - Dynamic MagniQuant Portfolio Holdings
6. Added 50 ABWPRA-AVERAGED DOWN- AT $19.42 (see Disclaimer) This will be my last purchase of Associated's Trust Preferred issue. This brings my total to 150 shares. If and when the TP recovers to around $21.50, I will sell the higher cost shares using FIFO accounting and keep the shares bought today, thereby effectively lowering my tax cost basis. At a total cost of $19.5, the yield is around 9.77%. The common stock is rallying this morning, ASBC, up almost 5% in early trading whereas the TP continues to experience some selling pressure. ABWPRA is described at length in two earlier posts: FDIC Preference Rules for Seized Banks/EWBC/Bought 50 of the TP ABWPRA Added 50 of ABWPRA This is a link to a recent article from the Business Journal of Milwaukee discussing the informal agreement with the Comptroller of the Currency and summarizing some statements made by a spokeswoman for ASBC. The Business Journal of Milwaukee:
7. ING's 3rd Quarter Report (own hybrids only-IND, INZ and IGK): ING reported "underlying" net of 778 million Euros in the third quarter, a significant improvement over the 229 reported for the 2nd Quarter. Investors appear to like the results with the common rising over 5% in trading this morning, and the hybrids which I own are also rising in price. I read in the quarterly report that ING expects the European Commission to approve its restructuring plan before the extraordinary meeting of its shareholders on 11/25. As part of that deal with the EC, ING will issue common stock to pay back part of the aid received from the Dutch government. If that happens, I view it as a positive for the hybrid owners. The recent rise in the common stock price is also helpful, in that it makes it more likely that the share issuance will be successful. More on ING ING to Partly Pay Back Dutch State with Share Issuance/