USG - Sold

I sold out of a large portion of USG since I feel like the housing recovery has happened and I made a lot in it.

I purchased at 11.46 and sold at 29.54. At the time of the sale it was about 5% of my holdings.

USG - Purchase

I purchased USG.  This is a housing play.
Price 11.61
3% of my portfolio

USG purchase

I've been looking at the market and finally decided to put half my account back in. I've been looking at USG since it hit 5 and bought a small 2.4% holding that executed at 8.65.

I'll put in a stop at 4.90.

Too buy or not to buy.

I loved this article Stocks look cheap, but that doesn't mean you should buy. My favorite part is the secondary title "Are stocks cheap? It depends on earnings", then goes on to say that "many market pundits think expectations for 2009 are way to rosy". Imagine the industry that gave us AAA ratings on on mortgage backed securities telling use that earnings are "Rosy"! Who does Wall Street think we are?

Let me lick my finger and put it in the air. Oh, hey, look at that, earnings look like they are going to be down significantly based on job losses and all the turmoil! I don't have any doubt that this is going to get worse. It's already well below where I got out so I'm staying out. I lost way too much in the dot com bust looking at prices and hearing people tell me "how much lower can it go? Just hold it, the market always goes up eventually." While they are probably selling.

Then you hear them say things like "USG Shares Soar on Warren Buffett's "Expression Of Confidence". There is some serious snake oil in that one. Warren is buying special shares and real ownership in the company. If it does go bankrupt, those shares still have value in company assets. The real stock which you and I own turns into vapor. Of course Warren wants you to follow him on this deal, just like he wanted you to follow him a few months ago when he was buying it at 40 last May! Don't do it. If you are wondering how low it can go, it can go to 0! Then Warren walks away with the bag. I really like Warren and think he's a great investor and has a good morality to him, but in all the cases of his current buying spree he's getting real value. All in all markets don't behave rationally, the behave with individual greed.

Most of us suffer when companies like Loral zero out there stock and reissue the next week at the same value. Yes, the SEC let this happen back around 2003. Most people would call this fraud, the SEC calls it acceptable. Yes, I lost some money on that one.

The two significant downturns I'm looking at and comparing this too are the 1929 crash and the 2000 .com bubble burst. Both of those took two or three years to reach their bottom. I've already shown the chart pointing at 6000 for the Dow as the balancing line (the mean) over an 80 year period and over that period there have been a number of times when it's below the line. So do you think it will stay above that line? 4000 anyone? If I'm wrong I'm willing to miss out on all the money you make and get back in when this starts behaving like a long term market again. If I'm right I'll get back in when this starts behaving like a long term market again. Either way, I play the market with a long term mindset, I just happened to take a little breather when payments for fraud and deceit came due.

USG sold

I sold all of my USG holdings today. Warren Buffet can have it as he has enough cash to prop it up. It sold at 19.23.

Current Holdings Starting September 2008

It's been a while since I posted. I was in Africa for a few weeks in August and I've been slowly coming back to the real world. We work in some really poor communities there and it is always hard to come back to the "ME" place when you've seen such spirtual wealth in the face of such extreme poverty. I know which one I would rather have and it doesn't have anything to do with this account. Overall I'm only down 6.5% for the year. I think it's been a hard year for everyone in the investment community and I'm pretty happy with that at this point. I think it's all going to come back by the end of the year. Especially after we get this election over with.

That said I've really ignored my account and have not looked at it in over a month. I knew it would be down some, but thought it would be worse. I mostly have not changed it because I don't think anything has fundamentally changed with my holdings. I know FNM and FMC crashed, but it doesn't seem smart to sell them at this point. If they go to zero it's not much farther than they are now so I'll just continue to hold them and make me look bad.

I was looking at SLV (Silver) this morning and see it is at a 1 year low. Glad I sold it, but since there is inflation in the air I'm thinking of buying some of that back for the same reason I made a killing on it last year. It seems odd, but it needs some more analysis.

Symbol	Paid	Cur	Acct Pct	Gain/Loss
ATVI	$13.44	33	31%	146%
TTWO	$16.18	23.52	17%	45%
DRIV	$47.72	44.27	10%	-7%
SNE	$43.88	37.45	8%	-15%
IBM	$117.07	116.2599	7%	-1%
CASH	$1.00	1	5%	0%
USG	$38.33	27.26	5%	-29%
AMD	$13.69	6.17	4%	-55%
EDD	$19.43	14.4	3%	-26%
STMP	$12.98	14.1675	3%	9%
EIX	$53.56	44.93	3%	-16%
FNM	$24.52	7.3	1%	-70%
TIVO	$5.89	8.87	1%	51%
FRE	$23.11	5.04	1%	-78%
JAVA	$17.27	8.905	0%	-48%

Current Holdings Starting July 2008

ATVI	$13.44	34.07	30.34%	154%
TTWO	$16.18	25.57	17.31%	58%
SNE	$43.88	43.74	8.57%	0%
DRIV	$47.72	38.58	8.25%	-19%
IBM	$117.07	118.53	6.33%	1%
USG	$38.33	29.57	5.27%	-23%
CASH		–	4.98%
FNM	$24.52	19.51	3.47%	-20%
AMD	$13.69	5.83	3.32%	-57%
EDD	$19.79	15.24	2.95%	-23%
FRE	$23.11	16.4	2.92%	-29%
EIX	$53.56	51.38	2.75%	-4%
STMP	$12.98	12.48	2.22%	-4%
TIVO	$5.89	6.17	0.88%	5%
JAVA	$17.27	10.88	0.39%	-37%

Wow, what a crummy month. I went from being up 10.3% for the year to 1.5% for the year. I've been burried in work so I haven't really paid close attention, but I think this was really a market correction and not a problem with my actual holdings. I'm very worried about FNM and FMC since they seemed to have dropped so much, but I'm willing to stick it out a little bit longer. Hey, it's all fun and we are bound to have up months and down months.

USG purchase

I made another USG purchase this morning. It is a building materials (mostly wall board) stock that I have been holding for the past six or so months looking for the bottom of the housing market. I just bought some more about a month ago. I think Warren Buffet was also getting in at around that time. It has gone down more (-9.6%) since then, but I'm looking at it as a really long term buy and trying to hit the bottom with consecutive purchases to bring my cost average down as it continues to drop. With the flooding in the mid-west I'm betting there will be a lot of wall board purchased in the next six months so I'm buying more and may do another purchase in a week depending on what the stock does in the next few days.

This was a 2.2% (of my account) purchase of USG, and puts my complete USG holdings at 5.5% of my account. Before this purchase it was down around 15% and now it is down around 11%. Think long term...

I also really like the 5 year chart.

My account has continued to fluctuate. It opened yesterday at +8.2% for the year and is sitting today at +10% for the year. There was a big drop in FNM and FMC and I'm continuing to look at it. GE dropped a bunch more and I'm really glad I sold it when I did. Wouldn't go near it right now. I got the papers for the Activision/Blizzard deal and voted for the merger last night. I rarely proxy vote so this is one I'm really excited about.

Current Holdings starting June 2008

Symbol	Paid	Cur	Acct Pct	Gain/Loss
ATVI	$13.44	$33.75	28%	151%
TTWO	$16.18	$27.07	17%	67%
SNE	$43.88	$50.39	9%	15%
DRIV	$47.72	$40.06	8%	-16%
CASH	$1.00	$1.00	7%	0%
IBM	$117.07	$129.43	6%	11%
FNM	$24.52	$27.02	4%	10%
FRE	$23.11	$25.42	4%	10%
AMD	$13.69	$6.88	4%	-50%
USG	$40.82	$34.05	3%	-17%
EDD	$19.79	$17.80	3%	-10%
EIX	$53.56	$53.23	3%	-1%
STMP	$12.98	$14.60	2%	12%
TIVO	$5.89	$8.41	1%	43%
JAVA	$17.27	$12.95	0%	-25%

Big big month. The account is up 9.4% for the month and 10.3% for the year. Mostly this was a big jump in Activision. The Sony holdings are already starting to pay off and DRIV has finally started to make a big swing back up. I should have bought more DRIV at the bottom, but then again, I shouldn't have bought it so soon. Lesson learned, I don't buy DRIV until it has a big drop since it has done that for me twice in the past and this is the third round and I missed it by buying too early. I like the holdings. If ATVI goes up a little more I'll need to do some profit taking and take 5% back out of it.

GE stop triggered

My stop on GE triggered today at 31.79 and I sold the entire amount. It closed at 31.72. It ends as an 8.5% loss for me and could have been a lot worse. I think the credit crisis (GE Capital) is effecting them a lot more than anyone is letting be known. This was something I didn't think through when I invested in it last year as a hedge against inflation. I now have 6.7% in cash to figure out what to do with. I don't have any solid ideas, but I may make another 1% purchase of EIX. I tried to make this a few weeks ago, but didn't realize that my cash had gone into the USG purchase.

As for GE, I do think it will recover, I'm just not willing to take any more chances with it. Anyone involved in credit, that hasn't corrected is suspect at this point.

Over all, my account has pulled back a little bit from the most recent gain, but it is holding most of it pretty well. The GE loss is hopefully just a footnote since it wasn't a big holding.

USG

I've been holding a small amount of USG (building materials) for a while now. I bought it too early, but I do think that building stocks are going to recover at some point and the best time to buy stuff is when it is low, right? So, after the close yesterday I decided to tripple down on my USG holding taking it from a 1.2% hoding to a 3.6% holding. It was currently down about 20% so this will definitely offset the loss a little.

The Next Big Bargain

Buffet followed me on TTWO so I figure we both must have similar investment strategies??

Current Holdings Starting May 2008

Symbol	Paid	Cur	Acct Pct	Gain/Loss
ATVI	$13.44	27.05	24%	101%
TTWO	$16.18	26.24	18%	62%
SNE	$43.88	$45.79	9%	5%
DRIV	$47.72	32.85	7%	-31%
GE	$34.70	32.70	7%	-6%
IBM	$117.07	120.70	7%	3%
FNM	$24.52	28.30	5%	15%
FRE	$23.11	24.91	4%	8%
EDD	$19.79	$7.57	3%	-11%
AMD	$13.69	5.96	3%	-56%
STMP	$12.98	13.71	2%	6%
USG	$46.99	$5.31	1%	-25%
TIVO	$5.89	8.23	1%	40%
JAVA	$17.27	15.66	1%	-9%
CASH		–	6%

Those are the current holdings as of the end of trading on April 29, 2008 and the beginning of Trading on May 1, 2008.

That is up 1% for the month and up 8.1% for the year. The account has been fluctuating up and down by 2% all month. It was up about 2% up until just before the market closed. All and all a good month. GE got hammered and I held it. STMP made a huge recovery. SNE went up 5% since I've owned it for just a few weeks and I can't complain. It offset the loss in GE. TTWO passed the week I've been waiting a long time for. IBM made a move and dropped back down a little and I'm very happy with it. I shouldn't have sold AAPL, except for the fact that I sleep better.