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Scott Wachsler
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I manage Wax Ink.net, 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
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Wax Ink
  • Performance - Week Ending 08/09/2013 0 comments
    Aug 10, 2013 10:36 AM | about stocks: LCAV, LXK, LECO, MHFI, MLI, CLF, TLAB, AGU, FSTR, MXWL, KAMN

    I have noticed that the Perma-Bears are once again starting to move to the fore with their predictions that the latter half of 2013 will see the stock markets fall by 90%.

    Realize that these are the same prognosticators that said 2013 would see 50% unemployment along with a 90% decline of the stock market, and 100% annual inflation.

    Yesterday I noticed an article that said a world-renowned expert, Chris Martenson, is predicting a 60% market decline within the next 90 days.

    I don't know Chris Martenson, in fact I have never heard of Chris Martenson until yesterday, so I really don't know if he is an expert or not, but I can certainly understand his dire prediction for the stock market.

    The Obama administration in concert with the Federal Reserve Bank, has been keeping the United States economy propped up for a very long time.

    Eventually, the economy is going to have stand on its own, and when that happens the artificial economic boom investors have been enjoying for the last four years will come to an end.

    When will that happen? I have no idea, and despite how much you read or hear about expert predictions, no one else knows when that will happen either.

    In the end, economics comes down to supply and demand. Abundant demand drives prices higher, while abundant supply drives prices lower.

    But just because there is abundant supply, demand does not end, it is still there. It is just temporarily being masked by the abundant supply.

    Eventually supply and demand reach their own balance, and market equilibrium is achieved.

    This market equilibrium, thanks to the government, has not been allowed to occur. Someday it will. Someday the markets will fall dramatically and the Perma-Bears will, for a short time be able to pound their chests and proclaim intuitive brilliance.

    Then after a few months, the markets will again resume the business of supply and demand, starting a new cycle of higher highs and higher lows.

    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

    Wax

    Markets
    The Wax Ink Portfolio was down 0.4% for the week. By comparison the Dow was down 1.5%, the Nasdaq was down 0.8%, the S&P 500 was down 1.1%, the Russell 2000 was down 1.1%, and the Volatility Index, commonly known as the VIX, was up 11.9%.

    Year to date, the Wax Ink portfolio is up 18.4%, the Dow is up 19.5%, the Nasdaq is up 22.2%, the S&P 500 is up 19.9%, the Russell 2000 is up 24.8%, and the VIX is down 12%.

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

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

    LCA-Vision, Inc. (Nasdaq: LCAV) - Neutral Investment Interest

    Lexmark International, Inc. (NYSE: LXK) - Neutral Investment Interest

    Lincoln Electric Holdings, Inc. (Nasdaq: LECO) - Negative Investment Interest

    McGraw Hill Financial, Inc. (NYSE: MHFI) - Negative Investment Interest

    Mueller Industries, Inc. (NYSE: MLI) - Negative Investment Interest

    OSI Systems, Inc. (Nasdaq: OSIS) - Negative Investment Interest

    Holdings
    This week's moving on up stocks were iron ore producer Cliffs Natural Resources, Inc. (NYSE: CLF), up 18%, communications equipment maker Tellabs, Inc. (Nasdaq: TLAB), up 6%, and agricultural chemicals company Agrium, Inc. (NYSE: AGU), up 3%.

    This week's floaters in the bunch bowl were municipal and industrial contractor L.B. Foster Company (Nasdaq: FSTR), down 9%, ultra capacitor maker Maxwell Technologies, Inc. (Nasdaq: MXWL), down 6%, and helicopter parts maker Kaman Corporation (Nasdaq: KAMN), down 4%.

    Not Performing
    The top portfolio non-performers remain communications equipment company Tellabs, Inc., down 55% since being added to the portfolio, garage door and telephone headset maker Griffon Corporation, down 35% since being added to the portfolio, and iron ore company Cliffs Natural Resources, Inc., down 28% 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 CLF, TLAB, AGU, FSTR, MXWL, KAMN.

    Themes: Investing Ideas Stocks: LCAV, LXK, LECO, MHFI, MLI, CLF, TLAB, AGU, FSTR, MXWL, KAMN
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