Santa Claus Rally...

This rally came too early to be called a Santa Claus rally this year!! To have a quick flashback you will recall that we recommended increasing our holdings of stocks to take advantage of certain actions earlier in the year like Quantitative Easing (QE). Looking back, I agreed with the thoughts of many other investors and economists that it was time to move up in the risk spectrum. At that time, I believe QE would negatively impact bonds and favorably impact stocks. Our picks ranged from: 1. Dividend Stocks 2. Commodities 3. Large Cap 4. Our Usual --Down and Out Stock w/ Great Upside Potential.

Urb Lessons Learned: Keep some skin in the game on speculative stories that perform well.

This year I learned to trust my instincts but I wasn't consistent with my usual strategy of keeping a little bit of a well performing stock. The following stocks fit our Down and Out Stocks w/ Solid Upside, however we sold early and didn't keep any to enjoy this even more of the upside:

~ Boston Scientific (BSX): Bought this down and out and eventually accumulated this stock at a dollar cost average of $6.20s. Looking back we sold this stock around $7 and now it boasts an asking price of $7.82. Things that make you go hmmm.

~ Audiovox (VOXX): This consumer technology play was a solid call after it clear our down and out strategy with great upside. Consumers are coming back and they make the great Xmas devices that are on people's wishlist. Bought around 6.40s, sold around $6.8os because I got jittery and this stock now trades around $8.45!!! Wow

This reinforces my lesson learned in 2010, keep some in the game, you'll regret it less later!

Here is a look at other nice calls since our shift away from bonds:

~ American International Group (AIG): Gone from $30s to $50s and it looks like the upside is just beginning. This was part of our down and out call, no dividend so the upside needs to be significant

~ Collectors Universe (CLCT): Maintained our position here from levels that range from $ 4 to 9 bucks. This stocks boasts a healthy dividend payout of 32.5 cents a share and keeps the income stream coming in. Management has cash so the dividend looks solid. And the ride up to the $14-15 dollar level has given us nice appreciation.

~ Iron Mountain (IRM): This stock is a quiet surprise because its seen good upside very quickly. Roughly a 20+% move, this was a down and out stock that boasted good dividends.

~ Republic Services (RSG): Waste management has never looked so sexy. I personally think this stock was battered for tough reasons, which gave us a great entry point and this stocks has a dividend.

~ Oracle (ORCL): I don't write often about this stock because I have never sold it since in 1999 or 2000. Yes, I have loyally owned it for 10 years. I never owned a lot and perplexed as to why I never bought more but its now gives out a small dividend which allows me to reinvent in ORCL.

UNDERPERFORMERS for 2010

~ Radisys (RSYS): The reason why this stock is listed in the underperform section because it hasn't gone down but its basically DONE NOTHING! If you don't believe me, check out my dog and largest shareholder David Nierenberg's letter to RSYS: Letter

Note: Please read this letter. Nierenberg has asked RSYS to take a number of steps to improve the stock price. It appears that RSYS just announced one of those actions, however it comes on the heels of RSYS trimming its 4th Quarter Outlook.

STAY TUNED FOR 2011