Asif Suria

Shop at Costco, Invest in Safeway

Interesting thought Mark. Thank you for sharing with us.

I noticed your 2006 paper about Wal-Mart rolling out its organic initiative. Who would have imagined a few years ago that Wal-Mart would one day become the nations largest purchaser of organic milk and cotton.

What are your thoughts on Dean Foods, another company on my radar as a potential investment?

Shop at Costco, Invest in Safeway

@psonava You are absolutely right about Costco making most of their money on the membership fees. I am quoting from memory here and so don't hold me to the number but I believe they get more than 60% of their profits from membership fees given how low their margins are on the products they sell.

Big Bear almost makes a good point about rebates. I have an executive membership and get back almost as much money in rebates as I spend on the membership fee.

At any rate, I don't have to specifically calculate the membership effect because it is included in operating margins and Safeway's operating margins are better than Costco's even without membership fees.

Five Sectors To Consider Shorting

If you did not research by past trades, take a look at my current model portfolio or even the portfolio from November 2006 when I initiated four naked put options to hedge the long portion (not specific long stocks) of the portfolio. Two of those four puts (a trucking company YRC Worldwide and a homebuilder St Joe) are still in the portfolio wth gains of 111.43% and 161.54%.

www.sinletter.com/port...


www.sinletter.com/arch...

As for the "tech-stock" portfolio, I would hardly call a portfolio that contains an Israeli generic drug manufacturer (TEVA), a travel company (EPAX), an oil drilling company (DO), an entertainment company (BBI), an Indian auto company (TTM) and consumer non-discrenary companies (PG and UL) a "tech-stock" portfolio.

If using multiple naked put options, using selective short positions and diversifying long positions across asset classes and countries is not called hedging your risks, I have no idea what is.

Five Sectors To Consider Shorting

Since you seem to have done the research on my past trades, I would love for you to show me when and where I was "naked long the stock again in my model portfolio". As most of my subscribers know I have been nothing but bearish on Countrywide since 2006. When those options expired I suggested that my timing was a little unfortunate ( I *only* made a 66.67% gain in 6 months as a "couple of points" on a $2.46 put option works out to a tidy gain) and it may be a good idea to roll them into new put options. While all my current positions are listed in the model portfolio, every single trade done in the past is listed in the Historical Trades section of SINLetter.com

www.sinletter.com/hist...

Five Sectors To Consider Shorting

It looks like QID achieves its leveraged shorting of the Qs through swaps and options as you can see from its daily holdings here

www.proshares.com/fund...

You can find additional information from their prospectus here

media.proshares.biz/do...

The inverse correlation between QID and QQQQ is quite apparent when you look at the following one year chart comparing the two

finance.yahoo.com/char...;range=1y;compare=qqqq...

Similarly the inverse correlation between TWM and the Russell 2000 is quite apparent when you look at the following 6 month chart comparing the two

finance.yahoo.com/char...=^rut;range=6m;compare...

Five Sectors To Consider Shorting

It looks like QID achieves its leveraged shorting of the Qs through swaps and options as you can see from its daily holdings here

www.proshares.com/fund...

You can find additional information from their prospectus here

media.proshares.biz/do...

The inverse correlation between QID and QQQQ is quite apparent when you look at the following one year chart comparing the two

finance.yahoo.com/char...;range=1y;compare=qqqq...

Similarly the inverse correlation between TWM and the Russell 2000 is quite apparent when you look at the following 6 month chart comparing the two

finance.yahoo.com/char...=^rut;range=6m;compare...