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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
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Wax Ink
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Wax Ink
  • Helping Henry 0 comments
    Jun 10, 2012 7:50 AM | about stocks: USG, GFF, IIIN, DCO, ARCB, TLAB

    The markets surged during the week, leading many Wall Street types to put on their red spandex body suits and Prada pumps, and declare it's all up from here. No explanation of what was up, but with a little imagination I'm sure a mental picture will emerge.

    Personally I think the markets were oversold and investors that were sitting in cash or bonds finally figured out that a better return could be had by moving to equities, which drove the markets up for the week.

    The question is, will the current market upward movement last. To be brutally honest, I have no idea, and what's more I don't care. At some point in the future the markets, and the equities in the Wax Ink Portfolio will move higher.

    Portfolio Commentary

    The Wax Ink portfolio was up 3.7% for the week, a welcome change compared to the pounding it has taken over the past several weeks. By comparison, the Dow was up 3.6%, the Nasdaq was up 4.0%, the S&P 500 was up 3.7%, and the Russell 2000 was up 4.3%.

    Year to date, the Wax Ink Portfolio is up 0.1%, while the Dow is up 2.8%, the Nasdaq is up 9.7%, the S&P 500 is up 5.4% and the Russel 2000 is up 3.8%.

    Market Commentary

    The indices seemed to react to Eurozone Central Bank promises that if needed actions would be taken.

    Such comments remind me of America's financial gurus, Dweedle Dee and Dweedle Dumb, Treasury Secretary Geithner and Federal Reserve Chaiman Bernake respectively, whom, with their hands in their pants and their minds in Arkansas, have done little to nothing to reverse America's business trends or produce American jobs.

    In my opinion, the same thing will happen in Europe as their economy continues to sputter and fart in the wake of the worldwide housing market implosion, which just like American banks, European banks rushed to participate in.

    Considering all of what has happened over the past several years and considering that banks were at the heart of the greed, graft, and corruption that was the housing implosion, I wasn't surprised to learn that the market rally last week was lead by the financial sector.

    Regardless of how many times the KY is replaced with Preparation H, investors keep coming back for more. No wonder, according to the Employee Benefit Research Institute, approximately 56% of all workers and 54% of all retirees say they have less than $25,000 in savings.

    If you take the time think about that sort of savings, it actually makes sense. Spend a few minutes reading through the plethora of financial nonsense (including this article) available on-line. Almost all of them make reference to Dweedle Dee or Dweedle Dumb (think government) actually doing something to improve the economy and thereby investors portfolios.

    What I find interesting is why investors don't get off of those double wide rear ends of theirs, and do something for themselves, starting with understanding what it is that they are investing in. It's nice to decide to buy a stock in mid hump, but if you have no idea why it is being purchased, the feeling of completion is going to be very short lived.

    Equity Commentary

    Holdings in the Wax Ink Portfolio benefited from the stupidity that is Wall Street, with building materials company USG Corporation (NYSE: USG), up 16%, garage door and telephonics company Griffon Corporation (NYSE: GFF) up 9%, and steel and iron producer Insteel Industries, Inc., (Nasdaq: IIIN), up 9%.

    The punch bowl would not be complete of course without the proverbial floaters, which last week included Ducommun, Inc. (NYSE: DCO), down 5%, trucking company Arkansas Best Freight Corporation (Nasdaq: ABFS), down 3%, and communications equipment company Tellabs, Inc. (Nasdaq: TLAB), down 1%.

    Political Commentary
    The only thing noteworthy in the world of politics was this video which reminded me that the longer you listen to bull...ony, the easier it is to understand.


    To enlarge the portfolio, please click on the image.

    Wax Ink is comprised of individual investors, NOT licensed or registered with ANY government agency. Please obtain the advice of a registered investment professional BEFORE considering any information obtained from this site.

    Disclosure: I am long USG, GFF, IIIN, DCO, ABFS, TLAB.

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