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No. of Recommendations: 3
Last night I went to my second block party since moving and met a guy that manages a hedge fund. He used to work for Business week and Investools (that ironically was owned for a short period by this portfolio.) We probably talked for about two hours about investing; I talked about why I lean a lot towards fundamental analysis, Google being a great company, but overvalued, K-Swiss, Value Investing. He was really impressed that I've e-mailed with Matt Richey and Whitney Tilson. He talked about options a lot, about how the main thing his household does use covered calls to reduce the cost basis, he talked about how he went to a dinner, or something, that Bill Mann was at, and how he had a "violent reaction" to covered calls and naked puts.

I'm not really sure what a naked put is...

Well, I finally found my "Stocks 2005" book so here goes my shortened explanations...


I've never actually been to the restaurant, but have eaten the wings at school - they were good. From what I've read on the BWLD, HG Board they are busy a lot, I've yet to find one here in Utah. Right now TomG seems to love it, but Bill Mann is not as enthusiastic; comparing it to KKD.
I once had a 40% gain, but that has evaporated pretty fast.
I'm considering selling some of it to add to the cash, so I can find a new position to start.

BWLD 14 $449.40 -3.05%


Another HG pick has great competitive advantages -- see earslookin posts -- I bought on the drop, and think it should be a good long term pick.
They make 3-D measurement systems.

FARO 25 $581.5 -2.31%


I wanted to diversify with an index, The S&P small cap, value, 600 looked like the best choice. At one point I thought I was down 40%, the I saw there were twice as many share :-)

IJS 8 $512.24 6.72%



Now we have two disappointers, both were picked from "Stocks 2005."

Lowrance makes GPS products, in "Stocks 2005" TomG put together 11 different things for his thesis and two catalysts: Rapid growth in GPS industry and the investor discovering that. LEIX is a micro cap with a market cap of 108.5 million, it said in stocks 2005 there was no share dilution, but it fell over 30% while the market cap rose, so I'll re-evaluate the investment thesis for next month and I may sell the shares I have at a loss.

Par is a pharmaceutical that I weight way to much in the initial buy, then I averaged down making Par become too much of my portfolio. Par was picked by KitKat and Admiral, as an undervalued cyclical. It's transitioning from a generic -- drug dealer :-) -- to specialty pharmaceuticals has been worse than anticipated <<>>
KitKat is still holding her shares, Admiral -- who says he will post on the board soon -- says his wife is still holding her shares, so I'll keep mine where they are but this thing is really killing the portfolio with a $325 loss, it wasn't supposed to move -- up, at least -- until late this year early next year so I'll wait until then to see what will happen. I'm looking forward to the Admiral's post.

LEIX 20 $422.6 -30.95%

PRX 18 $431.46 -42.95%



I got MDC from David Einhorn's interview with Value Investor Insight. Einhorn says that if his estimates of strong earnings are right then even a 2/3 of the current EPS $72 per share is way undervalued. Currently it's at $79 and has been a good stock for me.

MDC 7 $554.68 11.31%



I picked this when I saw it was about 50% of the BMWM portfolio, then did my own DD and saw it was also undervalued by traditional means. Nokia was doing well for a while but has floated back down to near my purchase price. I would recommend the post that's in hot topics right now on its industry.

NOK 26 $414.44 -.3%

At the time I thought Stanley was the most undervalued of all the HG picks, so far it looks like I'm right. Stanley has become the largest position, just from going up. While I was in Wisconsin with my Grandma it went up 15% one day, I told her and she looked surprised and said they bought the kitchen table in Wisconsin from Stanley thirty years ago :-)

STLY 25 $701 39.85%


That sums up the current Stock positions, I still have ~$275 in cash, and by next month may have sold LEIX and/or some of BWLD so there may be a new position from….

The Watch list

The Watch list is just a bunch of companies that I haven't looked into yet or are undervalued.

I'll just write the company names.

John Deere
Home Depot
Longview Fibre
Kinder Morgan Energy Partners LP
Kinder Morgan Inc
Atlas Pipeline Partners, L.P.
Pier 1

There's a lot more but that's what I can remember, if anyone has ideas I'd love to hear them.


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When Life Gives You Lemons
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