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
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Wax Ink
  • Performance - 10/04/2013 0 comments
    Oct 5, 2013 10:45 AM | about stocks: CHS, TSO, ESV, OI, STRA, GRA, WOR, AGU, MXWL, LAYN, MRK

    The game, or as some are calling it, the damn game, is starting to heat up. People have been laid off, government employees have been furloughed, and Smokey the Bear doesn't know whether to poop in the woods or go blind. It really is a stressful time to enroll in Obamacare.

    I suppose what I have found the most fascinating to this point, is the confirmation that Americans, just like me and you Americans, actually voted for any of these imbeciles. Harry Reid? John Boehner? Shelia Jackson-Lee? Barrack Obama? Are you kidding me? They are losers all, too dumb to breath and yet smart enough to get America and American's to elect them. Amazing!

    While the diarrhea continues to pour from the bowels of Washington D.C., and the band of 537, yes I have been forgetting the Vice-President in my count, continues to enjoy the stench, actual real life goes on for the rest of America. The demand for goods and services continues, slowing only long enough to allow those that require these goods and services, time to work out an alternative method to acquire them.

    The thing to note here is the demand. Demand is always the driving force. Just because the band of 537 has shutdown the government, does not mean that the demand for any of the services the government provides, has stopped. If anything, it is more likely that the demand for services has actually increased.

    But what does any of this demand stuff have to do with the individual investor?

    It is one of the main reasons individual investors loose money in the stock market. It is also one of the chief reasons investment managers seldom generate better returns for their clients or their mutual funds. They simply forget about demand.

    In my world, demand is a measure of prior years. Have sales, debt, and earnings, increased or decreased year-over-year. Has free cash flow increased or decreased? Has the company acquired any competitors in the past year? Is CAPEX increasing or decreasing?

    All of those things are on the demand side of the ledger as far as I'm concerned. And while I realize price determines return, in the end, demand determines how long that return will continue.

    Hi. My name is Wax, and I am an individual, 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 0.3% for the week. By comparison, the Dow was down 1.2%, the Nasdaq was up 0.7%, the S&P 500 was down 0.1%, the Russell 2000 was up 0.4%, and the Volatility Index, commonly known as the VIX, was up 8.3%.

    Year to date, the Wax Ink portfolio is up 23.1%, the Dow is up 15%, the Nasdaq is up 26.1%, the S&P 500 is up 18.5%, the Russell 2000 is up 27%, and the VIX is up 9.8%.

    The Wax Ink 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.

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

    Chico's FAS (NYSE: CHS) - Positive Investment Interest

    Tesoro Corporation (NYSE: TSO) - Negative Investment Interest

    Ensco plc (NYSE: ESV) - Positive Investment Interest

    Owens-Illinois (NYSE: OI) - Negative Investment Interest

    Strayer Educations (Nasdaq: STRA) - Negative Investment Interest

    This week's moving on up stocks were specialty chemical company W.R. Grace (NYSE: GRA), up 4%, cylinder maker Worhiungton Industries (NYSE: WOR), up 4%, and agricultural chemicals company Agrium (NYSE: AGU) was up 3%.

    This week's floaters in the bunch bowl were electronics company Maxwell Technologies (Nasdaq: MXWL), down 5%, heavy construction company Layne Christensen (Nasdaq: LAYN), down 3%, and drug maker Cubist Corporation (Nasdaq: CBST), down 3%.

    Not Performing
    The top portfolio choke and puke stocks remain communications equipment company Tellabs, down 57% since being added to the portfolio, garage door and telephone headset maker Griffon Corporation, down 33% since being added to the portfolio, and iron ore company Cliffs Natural Resources, down 36% since being added to the portfolio.

    Copyright © 2013 Wax Ink

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

    Disclosure: I am long GRA, WOR, AGU, MXWL, LAYN, CBST.

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