NEEDN'T SAY MORE

It is now painfully clear that it is not sufficient to buy good stocks.

POUT OUT

Let me first stating that this monologue is not PERSONAL. I have nothing personal against anyone, it’s purely business and professional. Having said that, this is rather emotional. There is no reason to deny that. I feel it rather strongly and I have nowhere to pout it out.

I am more upset about this perverse promotion than anything else, even though it is nothing short of expectation, more upsetting than if they had shown the door to everyone! This is a guy, who is not merely mediocre, useless, he’s actual HARMFUL. The more he does, the more damage. The longer he stays, the more the organization and the rest of us will suffer. They actually promote him? That’s like you lose a battle, lose a war, lose everything, including your shirt and underwear, but you win a Purple Heart!

If it is one of us, while I am not 100% certain (let’s just say 99.999%) that you will be pinked, I am more than 100% certain that you will not be promoted. How could you be promoted when all you managed to do in the past three years is to reduce assets and profitability under your management by 60%! Alright, I give it to you that it is not your fault, it is all other people’s fault, still, you can’t get a promotion in a normal organization, a normal society, a normal country, unless it is prejudiced, racially-biased, perverted, and utterly stupid. How unfortunate that I am actually a part of this organization. No wonder I always feel unaccomplished, I actual feel rather shameful.

WCG

Against my will, I averaged in some WCG this afternoon. The stock sold off by more than 11% in sympathy to the disappointing outlook of CVH. I thought the sell-off was not warranted, and the ferocity and magnitude smell like panic for me. I would have liked to add a bit more in order to pack the action, unfortunately, I run off the fund, so have to settle for a small number. I could be wrong though and WCG could potentially miss its numbers or lower its outlook on next Tuesday. I am a bit of nervous here. If the stock recovers and runs up to $35 level (yesterday’s closing) before the earnings, I may scale back a bit in order to keep myself sane.

WYE

WYE also got filled today at 45. I desperately need a rally, even a short one. Again, other than AMZN, earnings were very strong, with a couple of blockbusters (FFIV, IFSP, ISRG). A few interesting one, SIMG as one of them. WEBM also blew the expectation, although after market was rather muted. We’ll have to wait until tomorrow morning. Overall, very strong earnings reports tonight.

WIN ON WYE?

WYE

I put through a limited order for a bit of WYE at 44.75 and did not get filled. I would like to buy some due to the same reason of purchasing ADS. WYE had a great quarter, expectation exceeded, outlook raised, numbers upped by sell-side analysts, yet stock tumbled by almost 3%. Not exactly a panic selling, rather a healthy profit-taking. Valuation is reasonable at about 14X of its 06 earnings, a discount compared to its peers and S&P, unwarranted, in my view, as the company is growing at approximately 10%. I believe it should be traded at a premium of 20X. At minimum, it should traded at S&P average, which would be at 16X. I also like the sector, defensive and OUT OF FAVOR. I am not pressing though today as the market is up strongly. I would wait for weakness, preferably under $45, before I add this one to my portfolio. (It got filled).

I am bit of concerned about JNPR’s pricing action today. It appears that it did not participate this very strong rally, indicating distribution from institutions. While the quarter was great, it is not cheap and the pricing action did not give me much comfort. Given that I bought this on margin and for a TRADE, I am incline to sell it here. One of the worst scenario would be to turn this TRADE into an investment, a losing investment!.

JUGGLING

ADS

I put an order of ADS this morning and got filled at 35.50. The Q3/05 results were great, exceeding management and the street by a rather decent margin. Very strong growth in both top- and bottom-lines. Both 05 and 06 numbers are lifted, by management and sell-side analysts. The company bought 1.2 million shares of its stocks. But the stock got an almost 10% haircut. Why? It’s likely that investors (myself included) are still frustrated by the failure of “Air Miles� trust conversion. Blame Paul Martin! But isn’t it already discounted (by a sharp decline from $45 to below 40)? I am very reluctant to add fresh new positions from here as my longer term outlook for the market is not very positive. However, I thought this is an opportunity too great to pass. At 35, it is traded at 14.8X of next years EPS, a significant discount to the average, particularly in view of its long term growth (20%) and its stellar records. Moreover, in short term, the market is severely oversold. The downside risk for both the stock and the overall market is limited. The upside? It could easily recover to today’s opening, i.e. $40.

CCL

Sold remaining CLL to raise additional cash. I continue to hold the view that there could be a short term rally from here. I will continue to raise cash if it materializes.

XMC

Sold 700 shares of XMC this afternoon to raise additional cash. Also the stock continues to show weakness since last quarter report. Interest rate is raising, real estate market appears to cool down, default may increase and there is large inside selling. Next quarter will likely be weak as well due to seasonality. Not to mention the overall market is really weak. Cash in most of profit, still holding a rather small position.

JNPR

I could not believe I have done so many trades today. I add a very small position of JNPR in this final hour as the market starts to melt down, ON MARGIN NO LESS. I was not particularly enamored by JNPR, but I do want to test my temperament. When the market melts down like this one, I want to add some exposure. Like ADS, JNPR had a great quarter, exceeding expectation, raising outlook, but stock did nothing today due to this weak market. This presents a short term trade opportunity. “TRADE� is the word to remember. JNPR is not a cheap stock, it is traded at 30X of 05 and about 25X of 06, a rather lofty valuation level in view of its relatively slow growth potential. I intend to peel it away or stop it at 23.50 level when the market rebounds. I believe the downside risk is rather small. Upside? How about go back to its opening today, $23.98. I could be wrong and I have been wrong many times indeed.

TAKE SOME OFF THE TABLE

CCL

Scaled off some CCL here @31.35. First of all, I have about 40% gain on this name and I believe it’s time to take some off the table. Secondly, I think there might be a short-term relief rally here and I do not believe CCL will participate. There are better place to utilize the capital. If there were a rally, tech probably would run upfront, and it probably would not last long. I remain defensive. The trusts continue bothering me. A safe harbor (for this selling) turned into a lightening rod, by this stupid government! How frustrating.

RUN! NOT WALK

PJC

PJC announced its Q1/06 results and it was terrible. The conference call was even worse. The management sounded unenthusiastic, evasive and lack of confidence. What a difference a quarter would make! I made a mistake not to sell on the open and it went down by more than 10%. There is no sense to sell it now, I might as well hold it until next quarter and hopefully its results will improve somewhat from here. Oh, god, do I sound bad! ELOS and WCG are not working either. I am really depressed. In general, I found this kind of market is the most difficult to deal with because I really do not know what to do. If I sell everything, I would have lock in all losses. If I do not sell everything, I might lose what little remaining gain. Most of the time, I end up doing nothing and hoping the market turning around. What is the proper way to deal with this kind of market? How do pros deal with it? I wish I could learn from someone or somewhere.

MORE PAIN, MORE "ADDS"

WCG / ELOS

Adding some WCG/ELOS, as I felt the pain of this down market. My gut felling is that the market is due for a bounce. How much? who knows. But if it has a decent bounce, these two could go up by 10% easily, given their volatility. Both are quality names, with low possibility of misses in the coming quarter. Let see if they are going to work.