Scott Wachsler's  Instablog

Scott Wachsler
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I manage Wax, a baseline equity research company comprised of individual investors not licensed or registered with any government agency. I have been all cap value investor and independent equity researcher for the past 30 years, and believe that patience is the key to successful... More
My company:
Wax Ink
My blog:
Wax Ink
  • Performance - Week Ending 08/02/2013 0 comments
    Aug 3, 2013 10:31 AM | about stocks: HSY, IIVI, ITW, IMN, KSU, LII, MXWL, MRK, GT, AGU, AIR, DAR

    Market events occur every week that, for the most part, the average working class investor, like me, simply miss.

    I admit that I do try and keep up with a review of what happened on Wall Street during the prior week, but it is at best, a poor attempt.

    One of the things I noticed last week was that payroll growth was lower than anticipated. This to me was not news.

    Then I noticed that not only was payroll growth lower, the average work week was shorter, and the average aggregate wage fell 0.3%.

    Stand alone, this information was not earth shattering, at least to me, since over the years I have become quite cynical when it comes to anything the government announces.

    My first reaction was that it was just the government's way of revalidating support for Mr. Bernanke's buying spree.

    Then I read a report that said that said "homebuilders displayed broad strength".

    Talk about an about face. If payroll growth is lower, the work week is shorter, and wages are actually going down, how is it that folks are qualifying for mortgage loans in sufficient numbers that homebuilders are displaying any strength?

    I kept digging and sure enough, all of that prior stuff was just paving the way for the Federal Open Market Committee decision, a decision that been made long before the FOMC meeting.

    Miracle of miracles, Mr. Bernanke and friends decided to maintain their current economic policy in order to continue to support the economic recovery.

    What is one of the things a bull does while standing in a pasture?

    Hi. My name is Wax, and I am an individual investor, a working class investor, just trying to do the best I can in a world that was never intended for investors like me.

    Throughout the course of the week, I post a Daily Alert, which is my review of an individual equity. It is intended to help the reader decide if that particular equity is worth their time to research.

    The other thing I do, is let the world watch as I manage the The Wax Ink Portfolio.

    Perhaps watching me make the mistakes I make will help other working class investors avoid the investing pitfalls that seem to find me.

    Enjoy your weekend


    The Wax Ink Portfolio was up 2.2% for the week. By comparison the Dow was up 0.6%, the Nasdaq was up 2.1%, the S&P 500 was up 1.1%, and the Russell 2000 was up 1.2%.

    The Volatility Index, commonly known as the VIX, was down 5.8% for the week, closing at 11.98. The VIX is down 21.4% for the year.

    Year to date, the Wax Ink portfolio is up 18.4% while the Dow is up 19.5%, the Nasdaq is up 22.2%, the S&P 500 is up 19.9% and the Russell 2000 is up 24.8%.

    The portfolio breakdown remained unchanged with roughly 70% of the portfolio in equities, 30% of the portfolio in cash, and 0% of the portfolio in bonds.

    I finished baseline equity reviews on the following companies during the course of the week. My rating follows the ticker symbol.

    The Hershey Company (NYSE: HSY) - Negative Investment Interest

    II-VI Incorporated (Nasdaq: IIVI) - Positive Investment Interest

    Illinois Tool Works, Inc. (NYSE: ITW) - Negative Investment Interest

    Imation Corporation (NYSE: IMN) - Negative Investment Interest

    Kansas City Southern (NYSE: KSU) - Negative Investment Interest

    Lennox International, Inc. (NYSE: LII) - Negative Investment Interest

    This week's moving on up stocks were ultracapacitor maker **Maxwell Technologies, Inc. (Nasdaq: MXWL), up 21%, drug maker Cubist Pharmaceuticals, Inc. (Nasdaq: CBST), up 13%, and tire maker Goodyear Tire and Rubber Company (NYSE: GT), up 13%.

    **The worksheet for Maxwell Technology will be updated next week. I have been waiting on their corrected filings which were submitted to the SEC on Tuesday.**

    This week's floaters in the bunch bowl were agricultural chemical company Agrium, Inc. (NYSE: AGU), down 6%, airplane maintenance company AAR Corporation (NYSE: AIR), down 3%, and grease and chicken parts recycler Darling International, Inc. (NYSE: DAR), unchanged.

    Not Performing
    The top portfolio non-performers remain communications equipment company Tellabs, Inc., down 58% since being added to the portfolio, iron ore company Cliffs Natural Resources, Inc., down 39% since being added to the portfolio, garage door and telephone headset maker Griffon Corporation, down 33% since being added to the portfolio, and municipal/heavy construction contractor Layne Christensen Company down 22% since being added to the portfolio.

    Wax Ink is a baseline equity research company not licensed or registered with any government agency

    Disclosure: I am long MXWL, CBST, GT, AGU, AIR, DAR.

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