Yeah, well, yes.
In fact, I'm almost reluctant to mention this, but this month has been the best for me since I began investing 16 years ago. In percentage terms, my Roth IRA (unmargined) has gained over 70% since September 1st, paced by huge gains in FLEX, JBL, DSWLF, and my speculative pick VLNC(not an ECM stock). I have had good gains in DIIG as well. Of course this comes on the heels of a disastrous 5 weeks ending with the blow-out selling of FLEX the first week of September. My margin account equity is now more than doubled in the same time span.
This month wasn't only good on a percentage basis. Both accounts gained in value every day this month, including the big Dow sell-off day in early October. I am almost afraid to mention this, because it might jinx us going forward.
I posted some thoughts on ACT Manufacturing on the ACTM thread. I was surprised a bit by the ACTM sell-off. Only ACTM and PGTZ have reacted badly to earnings reports this cycle (since early September). I still am cautious on ACTM. I don't believe the company ever had the margins they reported prior to last fall. They were simply undercounting materials costs. I understand there wasn't any missing inventory. This appears to be a smoke-screen to hide the fact that they had valued inventory at purchase price, and never marked down or purged inventory of obsolete parts. Since I can't estimate the company's real earnings power, and I can't see a visible big growth driver, I don't have any ACTM.
Nam Tai is looking interesting here. The Albatronics deal seems like it could be interesting growth story. The company is buying back shares at a reasonable price, after buying back shares from its chairman at an unreasonable price. The book is about 14. Finally the Hang Seng has rallied about 50% off its lows, so Asian fears seem to be subsiding a bit. So at this point the stock looks like an interesting speculation, if you can get past the point that the chairman can't be trusted by the shareholders. He's screwed the shareholders at least twice in the last year, and given a chance, he'll do it again.
I prefer DSWLF at the current price. I think the Mita concerns will abate, and the stock will rebound back to 13-14 after earnings in the next week or so, and bounce back up into the high teens by early next year, after two earnings reports dispell some of the concerns about Mita and China. And the management of that company seems to be very aligned with shareholders.
Paul |
