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Sunday, January 3, 2010

2010 resolutions and LMT update

Hello everyone. Happy new year :-D

I hope everyone spent a good time during these holidays. 2010 is now in front of us, and it should be a tough year economically speaking in my opinion. During this year we'll have a lot of possible catalysts to reignite what we experienced in 2008. What happened in 2008 was mostly mainstreamed in the stock markets and the sub-prime factor, this year though the catalysts will come from the mother of all markets: sovereign debt. Greece, is in deep trouble, and no matter what the IMF says or their prime minister they soon will have to either default on their debt or to get intervention from the exterior, which in my opinion is a matter of months in order to happen. Portugal and Ireland would soon follow Greece's footsteps, unfortunately for me because I live in this beautiful country but is managed in such a bad way... sooner or later we will also have to recur to foreign help.

For the USD I think it will be a rosy year indeed. What I see from USD right now is a lot of strength signals and it should lead the index towards the 90-95 level. At least it's what I expect.

Now regarding the Low Maintenance Portfolio. I know we're a few days behind, since I didn't make any new posts the last 9 days. The change date should've been the 26th, but oh well, just a few days behind won't make a single dent on our expectations.

So for tomorrow we're selling from the Portfolio the following stocks:

- Terra Industries
- Valco Energy
- Garmin
- Time Warner (this was our star stock for the past year with 200+% in profits)
- Marvel (which was sold when Disney made the announcement)

The capital coming from the sales of these stocks will be allocated into 5-6 new stocks equally. If you're new and have no stocks or have only the stocks from past September, then 25% of your initial capital should be allocated equally between 5-6 stocks.

So the new stocks will be:

- Cherokee (CHKE)

- Aeropostale Inc (ARO) - (can't believe how I didn't remember this one before... I bought a lot of clothes in this store when I was in the States...although in EW terms and techically I don't like it, but hey this is a fundamental/value based strategy not TA)

- FluorCorp (FLR)

- Graham Corp (GHM)

- Sturm, Ruger & Co. Inc. (RGR)

...and finally:

- Gamestop. This one already is in our portfolio and once again made it through our screening. Since I believe in the company, and since it still shows up as one of the best companies around, then we can save ourselves some transaction costs and keep this one in the portfolio.

So in summary, we have 3 small caps and 3 medium caps (one that already was in our portfolio).

Let's hope that all of these turn out like Time Warner.

Note: Prices of sale and purchase taken into consideration will be tomorrow's OPENING price.


There is a problem with this post. I made a mistake to name Graham Corp. (GHM) since it was already in our portfolio from the previous quarter.  Therefore we're still missing one stock. This stock is Energy Recovery Inc (ERII).

I will consider tomorrow's opening price for this pick, so the results provided on this site could be easily attainable for anyone tracking it.

Once again I apologize for the mistake 
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