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Selling CWA +49%, Reducing VGR +25%

Mar. 14, 2014 2:03 AM ETCWSAF, VGR
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Guinness's Blog
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Last August

we suggested Coast Wholesale Appliances (CWA) for its chart and 9% dividend.

Ironically, we wrote that "A possible resistance trend is shown in black, currently around $4.65"

This past week brought this news: Coast Wholesale Appliances Inc. Announces Proposed Take-Over Bid by Insider

"CWAL Investments Ltd. has announced its intention to make an unsolicited all-cash offer for all of the issued and outstanding common shares of Coast not beneficially owned by CWAL and its joint actors at a price of $4.55 per share."

CWA was $3.14 when we suggested it, and has paid a generous 9% dividend.

It's now +49% and we're going to sell out of the position.

Back in August we also suggested VGR (Vector Group Ltd.).

It's paid a greater than 9% cash dividend plus a 5% stock dividend. It's also now 25% higher in share price.

As stated previously, we've owned VGR for years and it's a significant position, much more so now in light of the appreciation over the past few months so we're reducing our holdings. We may repurchase if it reverts to its historical average pricing in the mid-teens.

As stated Wednesday, "we are not bullish on stocks."

Thursday turned out to be one of the year's biggest one-day drops in equities. So far. There will likely be other days like today, and many far worse.

We already have effective market short hedge positions per postings last year, and suggest those who have none may wish to adopt some.

It may seem impossible now, and it might not happen soon or from present levels, however at some point items such as VXX and TZA will see 100% or more gains when markets plunge. It's happened before, and it can and certainly will happen again. Of course the risk is commensurate - know it and understand it.

Disclosure: I am long VGR.

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