I have restructured and re-christened my old "Alpha Fund" as the new Obama Fund, looking for "change" in the markets' character. Its strategy will be to buy beaten down stocks that could rise by 3x or 4x over two years if and only if Obama succeeds as President in returning the economy to normalcy. The total objective is a 10x on capital in the fund. The second leg of multiple returns will be gotten from intermediate term trading and stock rotation.
I have a list of 60 stocks in 25 sectors. The sectors include those that rebounded very strongly in the 1974 bear market and recession into 1976, plus a number of other sectors appropriate to the current world economy and situation. I rejected stocks with excessive debt and bankruptcy risks, as well as stocks showing terminal CFO stupidity in having excessive stock buybacks at high prices. My research on individual stocks was neither sweeping nor intensive. I relied on general measures provided by Daily Graphs, balance sheets and income statements mostly from Yahoo Finance supplemented by SEC filings as needed. My general knowledge of stocks and sectors was used quite often, too.
Do your own work. I will not buy every stock. I plan to buy stocks on good entries and rotate within the list as opportunities arise. I won't use margin until a good bull market trend develops. Diversify over sectors and time.
OBAMA FUND MASTER LIST as of January 1, 2009
Advertising: AMCN
Agriculture: MOS
Apparel – clothing mfg: TLF
Basic Materials: SSCC, FCX, HUN
Batteries: XIDE
Cement: CX (pullback)
Engineering: KBR, JEC (pullback), SGR
Financial: CIT, MS (pullback), EEFT, NBG, FCT
Gems: HWD
Hotels: IHG, HMIN (Chinese), MAR (on pullback)
Industrial: IR
Leisure: ACAT, MTN (pullback), DKS, CAB
Media: CETV
Mining, Constr. Eq.: MTW, TEX
Pollution Services: IDSA
Resources: AREX, ME, GPOR, GMET, ROSE, CRZO,
Oil Services & products: RIG (under 50), WFT, FTK
Restaurants: MRT; On modest pullback: CPKI, DRI, CAKE
Retail – Clothing: ANF, FL, URBN (modest pullback)
Shipping: DRYS, EXM, GNK
Shoes, Footwear Mfg.: RCKY, ICON
Steel: X, MT, GSI, SUTR, SID, AKS
Tires: GT
Truck Eq – mfg.: CMI, SPAR
Trucking: CLDN
Many of these stocks have been perky lately, so I am not alone in doing this. Try to get a good entry and not get washed out when the short term traders sell "en mass".
Obama Fund already owns GNK, EXM, FCX, FCT, HUN and a small bit of ultra risky SSCC.
Krypto Fund
For 2008, Krypto Fund was down 27.17% compared to the S&P 500 being down 37% and the Wilshire 5000 being down 37.23% in total return. So for dog biscuits as a management fee, I got 10% outperformance. Quite good on a relative basis. By the way, Krypto Fund outperformed in the years the S&P 500 was up, too.
Word of the Day
"Litotes" - noun [$10]; a term of rhetoric
Litotes means an ironical understatement, especially the expressing of an affirmative by the negative of its contrary. Example: using "I shan't be sorry" for "I shall be glad".
Sentence: Bunkerman's frequent expressions of not being sorry as large numbers of hedge funds are liquidated are merely polite litotes, as he truly is gleefully dancing on their graves blowing a trumpet in joy.
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22 comments:
good morning Bman
late start today......i have a question for you
i was lookin at the charts...........will 2009 be like 1932??? it was a horrid year after 1931
obviously i know your answer ......but lookin at the charts kind of spooked me about this year
what do you think....Bunkerman is the fortune telling machine in BIG?
It depends on Obama obeying me.
I think no.
I think 2009 will look like 1975.
Bought a bit of AMCN, MOS, KBR, MS, IHG, CAB, MTW, TEX, IDSA, MRT, FL, RCKY, CMI, SUTR, SID, SPAR, CLDN, ANF, NBG, WFT, ME, GPOR, GMET, ROSE, HWD, GT, XIDE, SGR, FTK.
Could not resist ... a bad sign.
But have much buying power ... now waiting.
Bman,
How can you see prosperity occuring anytime soon when the Deficit is now 64% ($8.7 Trillion) of our GDP ($13.5 Trillion). And next year and the year after it will get even worse, not better, as the Deficit grows and the GDP Shrinks?
Also, the Social Security surplus has been used to mask the real Deficit Amount. But now with the Baby Boomers retiring, Social Security and Medicare will no longer be Surpluses but instead become additional under-funded Liabilities.
The last time the Savings Rate was negative for two consecutive years was 1933 and 1934. The Federal Government is in worse shape now than it was in the 70's.
Does AIG and others have more CDO and CDS Liabilities that will come due this year?
I am seeing Deflation, now. But eventually all of this newly Printed Money will cause a nasty rise in Inflation.
The TARP has saved the banks and unfortunately the incredibly stupid bankers, for now.
There will be a Price to be paid for "Living Beyond our Means" for decades and it has not yet occured.
Now I see a Bubble in the Bond Market. The last decade has been one bubble inflated and then burst after another to try to keep this DEBT Driven Economy humming.
For how long can we continue consume more than we produce?
i think the 2nd best bowl game today
ole miss v texas tech..................i think ole miss gonna win the SEC west next year..........houston nutt a terrific coach
raiders favored by 5.5..........no play for me
long alabama -10...........tide too big for utah........saban won't call off the dogs
Maddoff wearing the Hole of Jackson hat....
vto_rsi5: Being an excellent shot with a sniper rifle, I'll pick off you points one at a time ;)
"Bubble in Bond Market" - I guess you mean the US Treasury Bond market. There is no bubble in the high grade or medium grade corproate bond markets or the commercial mortgage markets or any private lending market. Those look more like massive screaming buys.
I'm not soure waht you mean my "Deficit", which term is normally reserved for the annual federal budget deficit, which is not even close to $8.7 trillion that you quoted.
I see numbers of about $400 billion excluding the TARP for "deficit", which probably is not included as it buys assets, and is not pure spending.
Total Federal Debt is about $10 trillion, and only about $6 trillion is held buy the public (this # excludes social security funds).
Let's see: 3% x $6 trillion = $180 billion interest.
GDP is about $15 trillion per year. (from St. Louis Fed)
So debt service is a collosal 1.2% of GDP. Uh, where is the problem with servicing that debt ?
CDS "liabilities" don't come due. If the underlying security does not default the CDS just expires for no cost.
How many senior class CDOs actually default remains to be seen. I haven't see recent data, but in the fall, Blackrock said the Bear Strearn CDOs the Fed boughtr were performning well in actual cash flows.
I would not be surprised to see some senior class CDOs with undue concentration in CA, FL, NV and AZ default. But if they do, the actaul loss will not be a huge amount of the insured amount.
[I know nothing about the terms of the synthetics CDOs based on CDS paper]
"Savings Rate" numbers are crap. They do not include asset price changes and demographics affects them a lot, as does growth..
as for prosperity, the wealth of a nation is the skills and knowledge of its people. What has changed in one year ? Zippo.
Free people strive to improve themselves and their families. Once normalcy returns, 3% growth will reappear.
My opinion would change with majors new wars or trade wars.
There is reality, perception and finance. Reality matters. Nothing in the reality has chenged or been lost, except lots of excess homes in parts of the US.
I suppose an easy fix for that would be unrestricted immigration, but that might cause other problems.
re "printing money", I nknow that was a figure of speech, as this "money" hasn't actaully been printed adn is in electronic form.
The Fed can draw that out rather fast once they desire to, by selling the securities that they has been buying.
There is eventual inflation risk, but being an owner of gold and TIPs and real estate, I have that risk covered.
My last comment is that it's an fundamental error to think of the national economy as a closed system or one that has a time boundary.
So statements like, the "price has to be paid" for living beyonds means just don't make sense in that context.
US debt is all dollar denomiated, so usual third world borrowing problems don't arise.
Let the creditor nations start using their dollars to buy stuff from US. Is that not good for American workers+corporations ?
Big Al..have you ever burnt the turkey drippings black to make gravy???..try it for the Easter competition..you'll kick azz sir
bought CETV, too. Perfect cup & handle.
uh .. Big Al has a day job. I suspect he doesn't read comments in real time.
He's already thinking ahead, using a Mrs. B suggestion for ideas :(((
Bunky, where is the list i ask, your gonna wait and pay up....Frosty, that spiddy set looks like crap...breakout coming my aazzz...real buyers on dips only.
Be back, need to change my boxers.
RUN vto_rsi5 RUN
uh Frosty ... I published the list at 5AM this morning.
And made many buys at 10:30AM.
OK, I missed a bit. But found some good stocks with the work, I think.
now I really will wait to deploy more $$$. Got enough for a rip now into the Obama speech Jan 20.
Heck, Dow 15000 is still a long way off.
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