Not much time before market close and I want to be honest about my price at the time of my blog posts. Walmart is a cash-making machine, and this drop in share price will hopefully prove to be a good entry point. I'm keeping exposure minimal as there may be troubled waters ahead with this bribery probe. Apollo Group, in my opinion, is making long-term decisions that best position their brands and future earning potential. I don't believe that investor-funded education will fizzle out as many fear, and I believe this industry leader is well oversold.

Buy:
200sh WMT @ $57.72
600sh APOL @ $34.51

Cost:
-$32,250.00

http://weatheredoak.blogspot.com/2012/04/buy-wmt-and-apol.html

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I'm allocating about 6% of the fund into these securities. Long term I want to have 50-70% invested in stock, but I'm counting on better opportunities further in the future, and will continue to take my time.

ARCC, Ares Corp, is a disciplined private investment firm, that specializes in lending to high yield grade companies. The security currently yields 9%, a majority of the cash flow. This company behaves like a hybrid between a high yield bond fund and a mid sized company. GE and PG are both great companies at good prices. GE gives some, but not too much, exposure to the financial sector and other goods. PG holds very strong competitive advantages and growth looks predictable and dependable. TAP is a solid performer in a steady industry, and I like it at this price.

There is much more behind my stock picks than these brief descriptions, but I'll choose to keep that information private and just give a general explanation of my actions.

Buy:
ARCC 1500 shares $15.90/sh
GE 500 shares $19.04/sh
PG 200 shares $66.62/sh
TAP 300 shares $40.80/sh

Cash spent: $58,934.00

Current Portfolio:
APOL 400 shares
ARCC 2500 shares
ATVI 4500 shares
BRK.B 600 shares
COP 300 shares
GE 500 shares
PG 200 shares
TAP 800 shares
VZ 300 shares
P May 11 Put -30 contracts

$752,415.00 Cash

Disclosure: I am long ARCC, TAP.

Many financial models, like the Capital Asset Pricing Model, have many given assumptions that you'll never discover in reality, like "everyone has the same goal", "everyone acts rationally", "everyone can borrow or lend unlimited funds at the risk-free rate".

Investors in TLT, the iShares ETF for long term US Treasuries, currently receive a 3.15% dividend yield. They do this by investing in long term bonds which have a duration of 15.5 years. Duration is a measure of % Risk for a 1% increase in market rates. The way I see this is that these investors require a 3.15% rate of return on an investment that will lose them >10% if the investors of tomorrow seek a 4% return. What this really means is that these investors are seeking security, even at a loss, over other investments. Another factor is that people may be investing for reasons other than return- for instance, the central bank of China, who prefers a strong dollar for their economy to continue exporting goods.

Either way, I made this investment less than 2 weeks ago because I believed there would be the flight to safety that we've seen. Although I feel that I may be selling too early, I feel uncomfortable waiting for more "greater fools" to step to the plate, bidding up an investment that may have a negative risk-adjusted return given the growth potential of the world's economies and the global pressure for the Federal Reserve to devalue US Dollars.

Again I'll stress that I want to position this fund for long-term growth, and the more I feel uncomfortable about something long-term, the more I'll be willing to forfeit short-term gains. This results in a 3.7% gain on invested capital in 11 days- I could annualize this number, but in order to keep myself humble I'll just leave that for next time.

Also, included below are dividends earned from holding VZ and TLT. I continue to look for great stocks at great prices as this market is selling off.

Sell:
800 TLT @ 116.66/sh

Receive into account:
$0.50 dividend * 300 shares VZ
$0.29 dividend * 800 shares TLT

Cash Generated:
$93,710.00

Current Portfolio:
APOL 400 shares
ARCC 1000 shares
ATVI 4500 shares
BRK.B 600 shares
COP 300 shares
TAP 500 shares
VZ 300 shares
P May 11 Put -30 contracts

$811,349.00 Cash

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Buy:
800 TLT @ 112.47/sh

Cash Spent:
-$89,976.00

Current Portfolio:
APOL 400 shares
ARCC 1000 shares
ATVI 4500 shares
BRK.B 600 shares
COP 300 shares
TAP 500 shares
TLT 800 shares
VZ 300 shares
P May 11 Put -30 contracts

$717,639.00 Cash

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

COP is well positioned within an integral industry, and that position will naturally result in higher earnings as we see mild inflation and economic growth.

If stocks are castles, there is none stronger than BRK.B- the forces or events required to hurt it's ability to generate cash certainly hurts its competitors worse than itself. This, traditionally has resulted in the "Buffett premium", which is no longer there as it trades below what I believe is fair intrinsic value. Investor concerns about Buffett's health or political stances, ability to invest new cash well, and clear succession planning leave the stock oversold.

ATVI has seen it's P/E ratio plummet over the past 10 years, resulting in a very boring "stock" to watch. But as a company, exciting growth opportunities and their ability to drive earnings in a traditionally weak sector may lead to a turnaround in investor sentiment in the coming years.

Buy:
COP 300 shares $76.39/sh
ATVI 3500 shares $12.72/sh
BRK.B 300 shares $81.65/sh

Cash spent: $91,932.00

Current Portfolio:
APOL 400 shares
ARCC 1000 shares
ATVI 4500 shares
BRK.B 600 shares
COP 300 shares
TAP 500 shares
VZ 300 shares
P May 11 Put -30 contracts

$807,615.00 Cash

Disclosure: I am long [[ATVI]], [[BRK.B]].

Pandora, despite having great growth prospects, has struggled amidst the volatility of 2011 and cost pressure from the music industry. I believe they have a strong business and see this as 'growth at a reasonable price'.

Given the high volatility and uncertainty around the stock, the method of investment I'm choosing is a short put at a strike of $11. I'm selling someone the right to sell me 3000 shares of P for $11.00, anytime between now and the 3rd week of May. If I substract the premium I'm receiving for this contract, my break-even price on P is $9.90. It's trading at $10.57 now. Also, the "should-have-just-gone long" price, a term I just made up, is about $11.70. I'm choosing to sacrifice upside potential for a lower entry price, and believe I'm taking advantage of overestimated implied volatility in P- time will tell whether or not this is correct- but they offer a unique and effective solution for advertisers as well as for music lovers. The intrinsic value I see is enough for me to enter here and commit approximately 3% of capital (assuming option exercise).

Sell Short:
-30 P May 11 Put @ $1.10 (x100 per contract)

Cash Creditted: $3,300.00

Current Portfolio:
APOL 400 shares
ARCC 1000 shares
ATVI 1000 shares
BRK.B 300 shares
TAP 500 shares
VZ 300 shares
P May 11 Put -30 contracts

$899,547.00 Cash

http://weatheredoak.blogspot.com/2012/03/write-30-short-p-may-11-puts.html

Disclosure: I am long [[P]].