Riding The Gravy Train: April 2008

Riding The Gravy Train

Beating the market is fun and profitable. This is how we do it.

Wednesday, April 23, 2008

buying GE, CERP

Presently we purchase GE, General Electric, which closed today at $32.36

Our plan is to hold on closings over $30 for the long term, perhaps adding on any slide to the $30 level. However if a significant quick gain presents itself we likely shall seize that opportunity.

Although the recent figures from GE were a disappointment, we find that the business is strong and growing which we expect to continue while the financial side of the company produced losses which we hope will be remedied in the near term. In that light, we currently view the recent sell-off as a buying opportunity thus we go long General Electric.


We balance the relatively "blue chip" GE with a highly speculative purchase of CERP, Cereplast Inc.

Here we appreciate the innovation and patents, and note that recent selling seems to be abating just above a long-term up-trend. Factoring the price of oil currently above $118 in addition to the increasing bans on plastic shopping bags worldwide and to the overall "green" trend in society we believe CERP to be a reasonable speculation at the current $0.50 price.

Read more about the company by clicking here.



We receive no remuneration or incentive directly or indirectly in any way, shape, or form for buying or selling the stocks we do, or mentioning them in this blog. If we hold existing positions we divulge the fact, otherwise we generally buy and sell as diarized here. This blog itself is merely a diarizing of our thoughts and trades and is in no way whatsoever to be considered investment advice of any kind. Always without fail consult your broker or investment advisor before making any investing decisions.

To be notified when this blog is updated :
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Monday, April 21, 2008

selling both FRP positions, +19% and +14% respectively.

Exactly one year ago tomorrow, we entered FRP for the first time at $0.75 then added another position a month later at $0.78

Finally with this news, we may realize a profit.

While FRP is rejecting the offer, we note that gold looks weak in the near term and future production at Perama Hill is by no means a certainty nor is a future higher offer for FRP stock.

A conservative approach would be to sell only one position at this time, but we're happy to book whatever gains we can in today's difficult markets and especially in precious metals speculative holdings such as these.


Thus far in 2008 we've closed 10 positions for an average 23% gain on an average holding period of 7 months which implies an annualized gain of 39%.



We receive no remuneration or incentive directly or indirectly in any way, shape, or form for buying or selling the stocks we do, or mentioning them in this blog. If we hold existing positions we divulge the fact, otherwise we generally buy and sell as diarized here. This blog itself is merely a diarizing of our thoughts and trades and is in no way whatsoever to be considered investment advice of any kind. Always without fail consult your broker or investment advisor before making any investing decisions.

To be notified when this blog is updated :
Please e-mail christianguinness@hotmail.com with "Subscribe to blog" in the subject line or click here to do so automatically if your computer is configured accordingly.

shorting GOOG, SPG

Google jumped 20% Friday on its earnings report, closing just below $540 vs. Thursday's close near $450. We feel the stock is overvalued and more importantly history teaches us that it is extremely rare for a massive price gap such as this one to not be closed in fairly short order.

Factor also the major gains in the general markets the past few days to which there is normally a reaction. Further, with Google's earnings announcement behind us and the current earnings season just getting underway in earnest, we believe it unlikely that there will emerge unexpected good news to propel this company's shares even higher in the near term. The wind is not currently at this stock's back, in our estimation.

While we remain bearish the overall markets, in the case of shorting Google we attempt a short-term speculation from which we'd consider profits greater than 5% to represent significant gains. Whether the trade goes for or against us, we are unlikely to be involved for long.

We'd prefer not to see it trade above $550 but note that there is trend resistance circa $565 so we'd likely only cover for a loss if the stock is closing above that level which would make a roughly 5% loss, thus the risk minimal with appropriate stops in mind.


We also short SPG, Simon Property Group, which closed Friday at $102.48 We view this more as a fundamental trade which we'll stay involved in unless the stock begins to close at all-time highs above circa $125 or we perceive significantly better fundamentals in the U.S. economy and in particular in U.S. consumer debt and the retail sector.

As stated above, we remain general market bears and would likely turn to a neutral stance if the DJIA starts to close above 13000 - not much higher than it is now.

In the case of the specific melieu of SPG however, this linked posting and the links contained within it outline the reasons for our bearishness clearly given that, per SPG's Yahoo! Finance profile, "Simon Property Group Inc., a real estate investment trust (REIT), engages in the ownership, development, and management of retail real estate properties. Its real estate properties consist primarily of regional malls, Premium Outlet centers, The Mills, and community/lifestyle centers. As of December 31, 2007, the company owned or held an interest in 320 income-producing properties in the United States, which consisted of 168 regional malls, 38 Premium Outlet centers, 67 community/lifestyle centers, 37 properties acquired in the Mills acquisition, and 10 other shopping centers or outlet centers in 41 states and Puerto Rico."

Simon Property Group announces its earnings on April 29.



We receive no remuneration or incentive directly or indirectly in any way, shape, or form for buying or selling the stocks we do, or mentioning them in this blog. If we hold existing positions we divulge the fact, otherwise we generally buy and sell as diarized here. This blog itself is merely a diarizing of our thoughts and trades and is in no way whatsoever to be considered investment advice of any kind. Always without fail consult your broker or investment advisor before making any investing decisions.

To be notified when this blog is updated :
Please e-mail christianguinness@hotmail.com with "Subscribe to blog" in the subject line or click here to do so automatically if your computer is configured accordingly.