Stock Market Picks

I have two followers who are always asking me what to invest in (I think you are nuts.) so I figure maybe other people care what I invest in. About a month ago I was kind of freaking out because of tarriffs (Since Sargon ruled Akkad we've known that tariffs, like almost all taxes, are destructive.) and sold everything except for the gold fund, GLD and iShares 1-3 year bond fund, SHY. I am still holdiing those two non-stocks but today, I went back into stocks. I am now long on the following comapnies:

1. United Airlines Holdings, Inc. (UAL)

2. Broadcom, Inc. (AVGO)

3. CSX Corp. (CSX)

4. Corning, Inc. (GLW)

5. Nvidia Corporation (NVDA)

6. The Boeing Co. (BA)

7. Qualcomm, Inc. (QCOM)

8. Curtis-Wright Corporation (CW) We'll know in a year if I made the right decision.

Three Gold Merchants

I saw the three young scary Russians first.  The shop was deep inside the building. Like with all shops of this kind, I had to be buzzed in.  But this one had a large man by the door with a gun on his hip and a three-bar cross hanging on his neck.  An older man, maybe 35, sweating, was weighing small gold coins and putting them in plastic bags.  The third and youngest man, a double-headed eagle tattoo peeking out above his wife beater, spoke in a thick Russian accent.  "I've seen you before."
"Yes, I was in here a couple of years ago to show my sons the jewel map".
"What brings you in today?  We still have the map.  The oceans are lapis."
"I'm selling gold.  Can you give me yesterday's New York minus 1%?"
"Let me see it."

I reached into my pocket.  The man counting coins stopped and wached me pull it out and hand it to the younger man.  The watch on his otherwise bare arm was Patek.  His fingernails were dirty. He carefully weighed it and acid tested it.

"I must have a 3% profit. So I can give you..."
"Okay.  Thanks.  I'll walk up the block.  I might be back in a few minutes."

The Chinese woman was young and pretty and smiling like a snake.  Unlike the Russian's shop, hers was open and bright and orderly.  Her fingernails were perfect.  She smelled beautiful.  She cradled my right hand in her left as she took the gold from my palm with her right.  Her skin was cold and soft.  She smiled at me.  I would have let her devour me, almost.  She weighed the gold, she read the markings with a jewelers loop.
"You bought this in Chinatown".
It wasn't a question but I answered, "Yes".
"It's very nice.  I can give you..."
"Thank you, but I already have a better offer."
Cold narrow eyes.  "I can't pay more."
"You have some pretty things.  Maybe, I'll come back for that amythest ring."
"Thank you.  Please, come again."

The old Sicilian (He's connected, by way of the Falcone fmily, to the Bonanos.), a man I've done business with before, was siting at a card table looking through a big magnifying glass at an old belt buckle.  On the table before him were what looked like military artifacts from the WWI: Old French medals, a bayonet, a map case.  Around him on the walls of the shop were swords, sterling platers, hundreds of gold chains, cloth bags full of old (from the days when our money was real silver) U.S. coins, framed Krugerand collections, a commemorative plate of the wedding of Prince Charles and Lady Diana Spenser, and silver goblets full of Morgans.

He stood and greeted me with a hand shake and asked if I was buying or selling.
"Selling this", I answered and I set the gold on the card table.
"Hmmm.  You know the weight?" I knew he would weigh it.  He was just finding out if I had other offers.  I saw the sparkle of avarice in his eyes.
"I know, but you go ahead and weigh it."
"I can give you..."
"I already checked the New York and London prices this morning. That's all you can do?"
"It's called profit.  If you want more come back in a month.  Gold is going up."
"Okay.  Thanks.  I guess, I'll see you later."
"You know, this is the time to buy silver.  Are you in the market again?"
"I'm only selling.  See you later."

The Russians buzzed me in.  Everyone was in the same place but now the sweaty man was weighing little bars of silver or, maybe, it was platinum and recording the weights in a ledger.
"It looks like I won."
"Yes."
"Last night's New York spot minus 3%" (Even though it is $4 higher this morning)
"Yes."
He copied my name and address from my drivers license into the state's book.  I gave him the gold.  He counted out the Franklins.
"Don't feel bad.  I see a lot of this."

I walked out the door and I sobbed alone on the sidewalk for a few minutes before I walked home without my wedding ring.
Home.  But only for a few more days.  I think, I have enough money to get my own lonely place now.

It's eleven a.m. and I'm stopping to have some breakfast. Nothing too fancy, just a cup of coffee and a can of tuna, but it tastes good and is filling.  So far, this morning I tried to repair a door lock and after failing for 20 minutes, decided to install a new one.  I picked up the grounds.  I showed the painter what needs to be done in a vacant unit.  Later, I'll change a toilet seat in one of the occupied units.  I don't know how people break toilet seats.  I'm 41 years old and have never broken one.  I didn't even know it was possible until I took this job.    

In other news, we are trying to buy an income generating property in Vallejo.  It is slow going.  There are several 3 & 4 unit buildings that fall within our price range.  It's pretty amazing; the price difference between Vallejo and Santa Clara County.  Here we can't afford anything.  There we are looking at big profitable buildings.  And it is only on the north side of the bay.  Of course, I've already been thinking about where on the properties to plant the grape vines.

I began studying for the CBEST last night.  I don't have a real goal to be a high school teacher, but I think I'd like to have the credential just so I can fall back on it, if necessary.

Investment tip

If I had money and wanted to turn it into more money I think I'd buy GE shares. Its trading near its 52-week low, has a PE ratio of 14, and, this is the important part, sells stuff people have to buy even in a depression. Just consider this one tiny little part of their business: Traffic lights. Next time you are stopped at a red light take a moment to count all the light bulbs (probably LEDs now) at that intersection. But what else do they sell? More like what don't they sell. Jet engines, jet engine parts, medical devices, health insurance, money, appliances (large and small), power plants, measuring devices, aluminum smelters, gauges (They probably made the gauges in the dashboard of your car, or at least, own the patents.), and 10 thousand other products and services. And, this might be my favorite part, they pay dividends (currently at 0.48) year after year after year.

I'm still doing well in silver and analog chips and I don't want to sell just to reinvest the money somewhere else, but if I had extra money and a 10 year horizon, GE is where I'd put it.

In other news, I've discovered that buying real estate is like a part-time job. It takes a lot of time a work. The purchasing experience is not much like buying anything else.

Home

Athanasia, Basil Wenceslas, Anselm Samuel, and I arrived at home about 5 hours ago. Several days ago we departed on a northern heading. We traveled up the Juniperro Serra Highway from San Jose to San Francisco (I love all the Spanish names in California.), where we crossed to Golden Gate Bridge, motored through the Rainbow Tunnel, and continued north on the Redwood Highway.

When we got to Cloverdale, which is one of the Best Small Towns in America, we spent the night on the worst motel bed ever. The mattress kept slipping off the box springs. I'm not kidding. Other thanthat it wasa pleasant stay and a treat for the boys, who love motels. We woke up late and when we gotin the car we adjusted course to the northwest and drove through the Anderson Valley on State Road 128. We stopped at Booneville for breakfast/lunch and encountered many wanna-be Rastafarians who had descended on the little town for a Raggae festival at the Apple Show grounds. (I wonder how many of those kids knows Bob Marley turned away from Rastafarianism and died an Orthodox Christian.) After a pleasant and leisurely drive through the Hendy Redwods and along the Navarro River we reached the Pacific Ocean and turned north on the PCH.

Along the way we took a short detour at the Philo Apple Farm and took a walk around. We met a very big friendly dog that wrestled the boys to the ground and decided I was his best friend. We saw an interesting, and rustic (it was made from old barrel hoops) oil lamp chanelier that might have applicationin the Orthodox Church. I hada short conversation with the farmer about diesel engines. She says she would like to run hers on grease from resturaunts but there is a bio-diesel company in the county that has contracts with every single resturaunt along 128. He buys it all.

We reached Russian Gulch about 2 p.m on Saturday and began to unpack all our supplies. Athanasia noticed I forgot to pack some essential cooking items, such as a knife and tongs. So she ran into a market in Ft. Bragg to buy them. While she was gone I set up the tent and got the campsite organized. That's when I noticed I forgot to pack my sleeping bag. So, when Athanasia returned to the campsite it was my turn to go to Ft. Bragg.

That night we read to the boys, and I read much of one of my school books. It was cold and foggy. I was glad I had a sleeping bag.

Sunday morning we said morning prayers (The long ones from the Jordanville prayerbook) and were joined by a Polish Catholic man who was camping near us. After prayers we ate breakfast, cleaned up after breakfast, and then I went into Medocino to an internet cafe to do homework. (I wrote and submitted a review of this book for my Roman history class.) While I was doing homework Athanasia and the boys were at the beach at the mouth of the little river that runs trough the gulch.

While they were at the beach and I was in Mendocino doing homework, the rest of our pary arrived. My god daughters and their parents came to spend a couple of days with us. It was muchfun to get to spend so much time with them. Anselm and basil play well with them. That night, when everyone went to bed, I did more reading for school beside the fire, while Athanasia read Ozma of Oz to the boys in the tent. When she grew too tired I took over for her.

On Monday I slept in and did not get out of bed. I was whiped out from lack of sleep the night before. I had two large lattes while doing my school work at the internet caffe. Each of them had 4 shots of espresso. I keep forgetting that I am not 20 anymore and caffiene really does a number on me now. So, Sunday night was miserable for lack of sleep.

WHile I slept on Monday morning, everyone else went to Glass Beach at the north end of Ft. Bragg. They came back to camp with lots and lots of sea glass. My god daughters' father found a collection of tiny blue glass beads. In the afternoon, we walked up to the beach at the mouth of the gulch again. That night we made smores. Actually, I think we made smores every night.

Tuesday morning, we went to Potuguese Beach (AKA Driftwood Beach) at the bottom of the Medocino Headlands. We had a nice lunch on the beach and the kids all played among the giant driftwood logs. Many years ago, when I was 12 years old and my nephew, Daniel was 9 my parents took us to that beach and we erected a wall of logs. The boys and my god daughters were too small for that kind of exhausting work, but theyhadfun nonetheless. Except for when Basil was stung by a jellyfish. But it was a mild reaction, causing only a scream and a rash on his leg. He had me make the sghn of the Cross on it ("Heal me, Daddy!) and he was back to playing in no time at all.

My god daughters' and their parents left for home after lunch but Athanasia and the boys and I stayed there by the water for a while longer. Then we went back to the tent for our last night. More reading to the boys. Sweet sleep.

This morning we broke camp and I took my first shower since Cloverdale. The north coast does not ever suffer water shortages, thus the shower at Russian Gulch State Park was like a warm hurricane. There was no flow governor on the showerhead so the water shout out of it like nothing I've seen in years. It was wonderful. I was not alone in the shower, though. An ariolimax columbianus. But he/she didn't bother me and I didn't bother him/her.

We drove back the way we went, mostly. We stopped at the Floodgate, a really good Mexican place just northwest of Philo for lunch/breakfast, and we stopped in Boonville so Athanasia could buy a 6-pack of her favorite beer at the brewery.

We stopped at Cloverdale for fuel and coffee and got back onthe Redwood highway, headed south this time. But we didn't take it all the way in to San Francisco. On other drives along this stretch of 101 we had noticed a giant building off across the Alexander Valley (at the Geyeserville exit) and had been curious about it. So today, we decided to drive across the valley and find out what it was. It was a beautiful drive through Geyserville and all the small wineries, but we were very dissapointed when we ascended the hill and discovered that the huge building was just an Indian casino. We didn't bother getting out of the car. Instead, we drove down to Healdsburg and got back on the Redwood Highway there.

When we crossed the Golden Gate Bridge heading into The City the fog was comming in and we couldn't see the tops of the towers. The boys thought that was very cool. We took another detour from our route in San Francisco and and stopped at La Boulange in Cole Valley to get the boys a little treat. Then we just drove on home to San Jose, where I was greeted by a tennant with a leak in her kitchen drain.

Cast is off and other stuff

1. I don't know if I've mentioned it here or not but Basil Wenceslas broke his arm when he fell at a playground a few weeks a go. He's been a a cast since then. Today the cast cam off and he was allowed in the pool. He is so happy. I, too, am glad it came off. At least once ever other day he managed to hit me with it, always accidentally, and hurt me pretty badly usually.

2. We leave for a few days in Russian Gulch on Friday evening. It has become a family tradition. This will be our third time to go camping there.

3. I have to get two weeks worth of school work done before we leave on Friday.

4. Athanasia and I are thinking about starting our own property management firm. It isn't something either of us has wanted to do, but it seems to be the direction in which providence has taken us. We will talk about it some more when we are on vacation and will begin laying out the plan over the next few weeks.

5. Anselm Samuel begun Latin dance lessons last week. He has two hours of instruction each Thursday and practices at home. My main goal is for him to develop a sense of timing. I think that everything else he has been involved in, because it was performance oriented, was too much pressure for him. This is social dancing and he says it is fun. So far he has learned the basic step to Cha Cha Cha.

6. Devon Abram, my oldest son has changed his plan. He is no longer going to cooking school to be a baker but instead is enrolling in San Jose City College in a few days to study linguistics. He wants to be a language teacher.

Well, I think that's all. I have to work on a paper explaining the history and development of the Athenian constitution, actually, that isn't right. I have to finish the whole thing tonight. So, I'd better get to work now.

Stocks worth considering

My investing goal is to be able to take care of my wife when we are too old to work. Mostly, I look for companies with little debt, a history of paying dividends, strong brands. I also like to understand the business; who customers are, what the products are, sales cycle, etc. Below are the stocks I currently hold.


LLTC

AAV

MGIC

SWHC

MGIC and AAV are gambles. They do not fit into my regular strategy. But it is worth noting that they are foreign companies. I own them, in part, as a hedge against devaluation of the American dollar. Also, together, AAV and MGIC represent less than 20% my stock holdings. As I said, they are gambles. So far they are winning. But it bothers me that I don't know why. I probably will sell them in the next few months and and put my "winnings" into something I am more comfortable with.

Stocks

After a great run with Whole Foods Markets that almost completely restored the value I lost in 2008, I am only holding three stocks.

Linear Technology is a maker of analog components. Their products are in thousands of machines, they have little competition, and the barriers to entry are so high that it is difficult for other companies to get into the business.

Navios Maritime Holdings. This is a shipping company with very little debt and a well pleasing P/E ratio. Because almost all of their ships are dry bulk instead of containers they have the ability to grow at the front end of an economic recovery.

Silver Wheaton Corporation is a silver streaming corporation. Essentially, they bought the rights to the silver coming out of some of the worlds most productive silver mines. They do not own or operate the mines, they just own the silver, and sell it onthe world market. I anticipate that as the dollar declines in value because of deficit spending this Canadian company sitting on a mountain of silver will go up greatly in value.

A Busy Week

An interesting thing is going on here in Silicon Valley real estate. Prices for small multi family buildings are in the sink. For example, a duplex in San Jose that sold for 600,000 in 2006 sold this week for 320,000. But rents have fallen only about 10%. So, we have been looking to buy. We were approved for a loan on a tri-plex on Wednesday. But by the time we were finished getting everything together the building sold to a buyer for cash. The same thing happened with another building we looked at. But this last one we didn't even get the paper work started before someone else paid cash for it. The price was even bid up by several people throwing cash around. The seller's agent said,"I don't know where people are getting all this money. It's like they haven't heard there is a recession." So,we are still looking, but not as hopeful as we were last week. We might have to look for a multi-family in another city. I'm thinking a tri-plex or a 4-plex with only 2 bedroom units, within walking distance of a university. That will let us bring in more cash per unit but allow for roommate situations which makes renting easier. The only drawback will be haviIwe can manage it myself. But that might not be possible.

In other news, I began buying textbooks for grad school yesterday. That was much fun. Some I can get from the Stanford's Greene library. That is especially much fun. The Greene Library is an interesting building and the library is full of fascinating books. Also, it saves me seventy dollars.

Anselm Samuel and I went to see Yankee Doodle Dandy at the Stanford Theatre tonight. It was a really good movie. I had been singing many of the song in it my whole life but never knew their origin until tonight. When the film (an original print from 1942) was over Anselm declared to me while clapping very enthusiastically, "Dad that was a great movie" and then while we were swalking through the lobby toward the exit he said, "That was good. I'll give it five stars. If it were possible I'd give it a thousand." I think I have to agree with him.

Business Card

On the advice of my wife's father, a successful agribusiness owner in the Central Valley who is loathe to buy anything he can't write off of his taxes as a business expense, Athanasia and I are trying to start a business. Doing what, you would be justified in asking. Owning and managing rental property. (We have scads experience managing, owning will be the new part.) It isn't glamorous. It isn't millionaire-making. What it is is something that will let us build equity (we hope) and cash-flow (we hope) with minimal work (we hope), this last is very important since we will need to keep our current jobs. It's all very exciting, but boy is there a lot of work involved in starting up. Aside from finding and buying the property there is licensing, insurance, business card design, inspections, vendor recruitment (stuff like plumbers and electicians to call in an emergency), record-keeping, bank accounts, etc.

In trying to come up with a business card design I came across this fabulous business card of Kevin Mitnick's. Many years ago, before he was sent to prison, I wrote a paper about him for freshman English class. I don't remember anything I said in the paper (it was 20 years ago), but I remember being astounded by Kevin Mitnick's brilliance and thinking that if he had been given greater challenges and guidance he could have avoided his criminal behavior. But what was a teenage computer genius going to do in the 1980s? Go to work for TI, IBM, AT&T, or EDS? Not very likely. Now, companies exist that snap up that kind of raw young talent. Even the Army has a program for slovenly, pale, overweight, teenagers with unusual computer talent. But not then.

Mitnick, the father of all hackers, is out of prison and is working as a computer security consultant. Now instead of trying to hack into the worlds most powerful computers, he is stopping the hackers (and spies) who would gain access to the private information of millions of people and companies. Given what he does and what he did, can you think of a better business card for him than this one that is printed on a set of lock picking tools?