2018 YEAR IN REVIEW – A YEAR OF GROWTH...A YEAR OF OPTIONS

2018 was quite an interesting year for stocks, the economy, and for me.  Before we close the book on this year, it’s also fitting to look back and reflect.  This is bit of my spiritual side speaking but for my financial folks it’s a moment to stop and balance your books. If you’ve read my previous posts, I talk about the importance of goal setting.  Now is the time to reflect on whether you hit those targets across ALL of your Pillars. Did you grow your spirit, mental fortitude, physical well-being, and finances? 

When I take a moment to reflect, I see some small strides I’ve made which I KNOW I will carry on into the New Year. My past year was the year of the FITBIT, where I became physically healthier (even playing basketball one a week) by challenging myself mentally to meet my daily health goals and give up unneeded foods, sugars, etc. I even gave up drinking (with the exception of a HS reunion event) and I was surprised I was up to that challenge (considering Little Jon wrote the Patron song specifically for me).  I concluded my financial challenge of renting, for the last 1.5 years, a house that did not meet most of our needs BUT it allowed us to SAVE and meet our new budget goals (2 paid off vehicles that are over 14 years old).  Again, an exercise in mental toughness for those who struggle with sacrificing today for a bigger picture.  Next, I personally want to thank my family for the changes they made this year to help us meet our family financial budget. This is turning into an effortless exercise (NOTE: IT DID NOT START THAT WAY) of developing a budget at the beginning of the year, then as a family we have to log all of our actual expenses. We use only one joint family account for family planning so there are NO SECRET EXPENSES that crop up (if we didn’t budget for it don’t bring it up and it’s not an item we are buying). In summary, we MET THE BUDGET FOR OUR HOME!!  Another goal met was buying our 2^nd Home! This was accomplished by those seeds we sowed a few years back…renting our first home, budgeting and sacrificing for our new home which took a few years to save up for the deposit needed.   

Many will overlook that these activities crisscross through a few of my Pillars; rarely does a challenge involve just one.  Taking on these goals has made me mentally stronger, a decent multi-tasker, better prioritizing and dealing with RISK.  I am equally proud of the last two items which have fueled my growth the most this past year.  # 1 – I took on the project of building out a consulting practice after companies continued to approach me for my skillset.  I still work in Corporate America but on my terms which has made me SIGNIFICANTLY less stressed (Pillar: Spiritual), in better health (Pillar: Physical), make more money (Pillar: Financial), and more technically skilled (Pillar: Mental/Education) then I have ever been.  #2 – I explored options for the first time in portfolio and it was a big reason for my investing success this year.  I have been studying it for months, used a fake portfolio of money to test trading strategies out, and implemented BASIC trades that have complimented my LONG-TERM VALUE oriented approach.  I repeat, I was afraid and had never traded an option contract in my life.  This year I’ve executed over 80+ option contract trades in a way that I believe lowers my investing risk, especially considering I’ve told people to be cautious because we are in the 10^th year of a stock market rally.  In summary, always stay balanced, clear minded, and focused. Help others yet use common sense and be prudent. The survivors in "The Walking Dead" did not survive from being lazy...you always have options and choices in life. Stay blessed.

For my reflection, and those of you that come here for the stocks my Financial YE Trading Review:

What Worked?

VALUE – By sticking with my value approach, I barely bought or sold ANY stocks in the last year. I sold 3 stocks this year that I held for more than 1 year because I felt the markets were reaching their tops.

Apple (AAPL) – I sold my entire position of Apple @ $200. Remember when we bought under $100. So long old friend until we meet again.

PBF Energy (PBF) – I sold energy which shot up earlier in the year. Now energy is back down to its lows. We’ll have to scrape the bottom of the barrel and see if its value time to pick shares back up.  PBF was in the low $20s and I sold $47. Funny at the time I thought I got out a little early.

Sirius Satellite (SIRI) – I owned this stock because I used to own XM Satellite radio, yes since 2005.  I watched the charts hit highs of $6.62 and decided to part ways after 13 years.  In a strange twist of irony, I recently purchased Pandora…who is being acquired by SIRI. We may be reunited again J

OPTIONS – My experiment in options was helpful this year.  When the market is up 10 years straight, the only thing that is certain is VOLATILITY.

            Volatility Index (VXX) – I traded the VXX over 5 times successfully for big gains. My only reflection was to bet bigger.

                Options – I traded over 80+ options contracts. I needed to test my strategy okay. We traded small amounts for high success. I might be above an 85%  success rate. Time to ramp up

DISRUPTION – I traded options contracts 3 sectors that were ripe for Mergers and had a handful of option contracts that did well when the stocks were acquired by other companies:

KLX Inc. (KLXI)

Dell Technologies Inc. (DVMT)

Cronos Group Inc. (CRON) * I believe the deal is still pending, but my options were sold

Red Hat, Inc. (RHT)                                 

Time Warner Inc. (TWX)

What Kind of Worked?

Radisys Corporation (RSYS) – I held RSYS for years. Sold some during the good times and closely followed the quarterly earnings. They were in the process of turning the company around but had the RISK my small consulting practice has. They were reliant on 1 or 2 big vendors. The biggest being Verizon. When VZ abandoned their unlimited data strategy for a while it hurt RSYS earnings. I felt vindicated when the acquisition was announced and I believe Reliance Jio purchased this company early as 5G is now taking off a major strategy for all telecom companies. So I feel vindicated they were purchased and rebought before the acquisition. BUT I did take a loss on this position.

What did Not Work?

I have 3 simple lessons learned that all investors must heed:

1)       If the Government is MAD at another Country, GET OUT of those option contracts: I had two Chinese stocks that got beat up once the Trump Administration decided to impose tariffs on China:

NXP Semiconductors N.V. (NXPI) – I had a profitable position, up huge. Trump Administration began their tariff stance and China retaliated by NOT APPROVING the Qualcomm merger of NXP. Qualcomm needed approval from 9 countries

JD.com, Inc. (JD) – Another contract that was positive, and you know the rest.

2)      Don’t trade options contracts into earnings season:

Match Group, Inc. (MTCH) – I got busy at work and should have exited this position before earning. Went from being up big, to a small loss. Lesson learned

3)      Don’t hold option contracts when the market begins declining:

Teva Pharmaceutical Industries Limited (TEVA) – I was up by enough points that I was going to simply let the contract expire profitable. I don’t think you understand, Teva was at $23 or higher and I had a contract for $17. During the market downturn, I saw the unbelievable happen in a matter of 2 weeks. Again went from being up to taking a small loss.

Caesars Entertainment Corporation (CZR)

Side Hustles 101 - Risk vs Reward

When I write, my goal is not only to express myself but to motivate others that it is not that difficult to invest IN yourself, FOR yourself and for your future. There are examples everyday, similar to General Motors, that company's are willing to do whatever it takes to bring their costs down and that includes recent layoffs to the tune of roughly 14,000 people. Now being an urban economist I remind people it's the game, the hustle, and it will always be that way why???...because it's called "supply" and "demand". Now I'm not much of a math guy BUT: Less demand means less cars = layoffs.

It reminded me of my winters in Chicago and trying to make the train on time.  It just never happened! And of course I need a list of things to blame: why did it have to snow, why are there bad drivers, why is every light red, why did I wear dress shoes that day, why is the train on time, and why isn't someone who sees me on the damn train telling the conductor to wait. So over time (trust me a over a long period of time), I learned to be more aware of my surroundings. Back then, I begin taking my computer home AND when I have one of those potential day horrible snow days...I stopped running to the train and stayed at home... logged in, messaged my team at work, and worked remotely.

It was so simple I kept wondering why I didn't do it sooner. This is how I view side hustles like investing. You can keep doing what everyone else is doing...OR you can unplug, be more aware, better your life and be prepared for the snowy days of life. I often used to joke with people many years ago that soon I would be going to work for the extra income it provided. Note, the key word being extra...supplemental...in addition to. Get yourself a side hustle because while there is blame to go around...I tell people to stop running after the train.

Side Hustle 101
I don't knock any side hustles, gigs, hacks (or whatever slick name people want to call it today) but I do remind people it should have a decent risk/reward trade-off and you should be super conscious of your time. Because the most important commodity in life is ironically your time. Many years ago, when I understood this basic principle, I purposely chose investing. It doesn't take much of my time...I think...and the rewards are pretty good and it's not even something I do full time. But investing has allow me to prepare for the snow day, the blizzard, and anything life throws my way. For me, Side Hustling = Freedom Insurance, many fear the knock on the door...I prefer to yell "I'm Busy at The Moment".

 Myth Busting - I've learned recently that people view some of the things I do are RISKY. The FUNNIEST thing is that I view myself as one of the most risk-adverse person(s) out there.  My profession confirms this theory.  I stay risk adverse because I learned early on that to actually make money to have to be a really good steward of money. Don't take huge ridiculous risks and wait for opportunities that are in your favor. I have learned this from Wall Street, Hip-Hop, and Corporate America...3 very similar industries that recognize one simple rule: BIG BANK TAKE LITTLE BANK. I wait for situations where I have a great chance to win...and then I invest or buy on my terms. This is one reason why I taught myself to play poker. I hate the game because I'm scared to lose money but oddly the principles of poker are amazing at teaching you patience needed to invest. I learned most people just want to play every hand and get in on the action. The greats ones often sit and wait for the right odds.

 And I can't leave without a little stock update. Since we are on the topic of Risk vs Reward, hopefully you recall my write up of Radisys: Radisys Risk vs Reward

Radisys Update:  My update today is Radisys just announced the government approved its merger with Reliance JIO and the acquisition date will be December 7. Go back and read my write-up on August 1st and for those of you that did enjoy that 15%+ gain in 3 months. I liked the trade so much I bought it in my personal account, my retirement account and sent a text to anyone that would listen.

RADISYS - Still Room Before the Buyout

Radisys (NASDAQ:RSYS) -- This is a stock that I've followed and blogged about for many years and for FULL DISCLOSURE: I OWN SHARES OF RSYS

If ya don't know now ya know: Radisys is getting purchased by the largest cell phone provider in India, Reliance Jio.  

I quickly knew something was brewing because my portfolio was up sharply that day and my brother even called and asked if I had heard the good news.  While he was talking about RSYS, I was thinking about the fact that he had actually been listening and occasionally reading stocks I track and blog about.  Most investors LOVE an acquisition...and I'm no different.  Oddly, because I've owned RSYS for awhile I have a little HATER in me because I've bought in at higher prices in the past so I will have a loss on some older positions in my portfolio. 

Breaking Down the RadiSys Arbitrage

Arbitrage...I know technical trading language. So to keep things simple, playing the Arbitrage is like betting on whether the top college football player will get drafted with the 1st pick in the NFL draft.  We all know that it likely to happen BUT every now and then...it doesn't happen. 

RSYS is the like the top draft pick and they are being purchased for $1.72 in cash as stated in new releases and in the latest earnings conference call by the CEO.  The stock traded today at the $1.48 level EVEN THOUGH we all know they will be purchased (drafted with the top pick) for $1.72.  Buying the stock now is like getting in on a poorly kept secret -- "The Arbitrage".  But before I pull the trigger on a 16% gain, I have to weigh the risks (ughh sounds like I'm still working):

Geopolitical (Country) Risk: Believe it or not, I had to consider whether either company's government may get involved in nixing the deal. RSYS (American), Reliance Jio (Indian) - I think it's unlikely to get nixed but it should be considered as the proposed deal of NXP Semi & Qualcomm got the backhand from China likely due to their beef with the Trump Admin over tariffs (their deal never got approved).

Financial Risk: I see limited risk here, as it's a very small deal ($74M) and it's all CASH. Reliance being the largest cell provider in India seems to be able to easily close this deal.

Timing Risk: It was announced the deal will close in Q4 2018. It's August, so 1 quarter is not too lengthy in the corporate world for an acquisition.

Upsides: Another buyer could cause a bidding war but this scenario seems unlikely as no one else has come forward. Surprisingly, the latest earning report was very positive so you wonder if the deal could be sweetened.  It's unlikely as RSYS was a penny stock prior to the acquisition.

It's hard to call the last indicator Upside risk but I did want to point out that the CFO bought a large share of stock a few months back which was a very bullish sign.  It's what caused me to follow this stock closely over the last months but sadly I had analysis paralysis and didn't follow my gut which was telling me to load up after that recent indicator.  My final thoughts are this all cash deal will go through and a 16% spread is an opportunity for a moderate gain with limited risk. 

Portfolio Update

Radisys (NASDAQ: RSYS)
As you all know I have owned this stock for a long long time. This is my second time around so search older posts for my writings. I am more positive about the direction its heading after yesterday's earnings call.

Positive Earning and all to important Approvals...

I will first start off with Orexigen (OREX). The did not get the coveted FDA Board approval for Contrave, their weight loss drug. I was watching closely as many people made calculated bets on which way this all too important approval would go. I think the best write up was from an article on Seeking Alpha which outlines the cases for this drug to not get approved right away. It outlined points from the 2010 panel, not board, meeting which outlined that many doctors on the panel and board are concerned about the elevated readings blood pressure in people that were part of the phase III testing. Glad I read that article because I almost pulled the trigger. Oddly enough I think their may be an opportunity now that the stock was slammed by over 72% to the downside after the closing bell. It was from roughly $9 to a 52 week low of $2.47. If you've got ice in your veins because of the blizzard. Nibble here on Orexigen because again there is an all to important thesis out there about this stock. It was known in the FDA panel review that they already thought more monitoring of patients would need to be done based on patient data. This along with the comments from panel members should have been taken into consideration as the FDA was not looked in a favorable light due to the last approved diet drug that had to be pulled from the market. There is clearly a high hurdle rate that must be met for diet drugs. But at these levels for a drug that made it through Phase III with fairly good efficacy tests should be looked at closely.

Baidu (BIDU) - I've been watching this stock and the earnings were better than expected. Now is way above where I want to acquire but remember this is the Google of China, and there is serious value to be had.

Radisys (RSYS) - Finally, they reported better than expected earnings. We will need more quarters of this for the stock to keep rising.

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

Like its Dynamite

If you haven't heard the song Dynamite by Taio Cruz you have got to check it out. Great song and it describes how our picks have been lately. My goal is to hopefully post more but write less. In this turbulent market, I think we have the right strategy for investors: wait for huge discounts in stocks and don't be foolish... take gains where they make sense. I try to frequently summarize recent picks and give status updates on older picks:

American International Group (NYSE:AIG) - I am trying to track down the most recent post of AIG. If my tracker is finally up and running I will look to see when I bought the shares. AIG was a pick that practically hit me in the head. I had a hard time recommending this stock but to be honest I listened to Bill Gross awhile back who said buy what the US Government is buying. I will write more later, as to my opinion on why this would be the case with stocks that are basically owned by Uncle Sam.
Disclosure: I own share of AIG

Boston Scientific (NYSE:BSX) - Not a stock for weak stomach. But this company has made an acquisition and bounced high recently on publication about their defibrilator devices. This is one where I would continue to buy on dips. Dollar cost average in and be patient and this company is in a restructuring mode.
Disclosure: I own shares of BSX

Exar Corp (NASDAQ:EXAR) - Appears to have found a nice floor around the 52 week low mark. This could have good upside from here. Moving nicely already.

Audiovox (NADSAQ:VOXX) - Moving above recommend price.

Theravance (NASDAQ:THRX) - This one was a really solid call. It ripped up from recommended level after positive news based on FDA comments.

I also written recently about these stocks and continue to see solid upside going forward:

Iron Mountain (NYSE:IRM) Up very nicely from recommended price. I watched this closely and there was a chance to buy this stock at an even further discount around the $20.80 and above. Doing well so far.

Comcast - Note there are two tickers for this company. Its up over the recommended price. I will write more about the difference in a new post.

Long-Term Stocks:
I love these names and they continue do very well:
Enterprise Partners (EPD)
Radisys (RSYS)
Disclosure: I own shares of RSYS
Collectors Universe (CLCT)
Disclosure: I own shares of CLCT
Visa (V)
Disclosure: I own share of V

Portfolio Spring Cleaning...

It is technically still spring, right? I know judging from the mid 50 degree weather here in Chicago that this seems about right! Although I have been really busy I am starting to understand my investing habits a little. I think I tend to get more interested in the markets when volatility begins to pick up. This could be it or maybe I am finally drinking my own Kool-Aid and using the volatility to find deeply discounted bargains. Well, lets hope its the latter because I have been tuning in alot more lately. I continue to write about the extraordinary run that we've been on lately. It started earlier in the year when one of our largest holdings was liquidated due to a buyout of Burlington Northern Santa Fe (NYSE: BNI). I felt good here because we owned this position for almost two years, and held strong (thanks to the dividend) through the downturn and watched the company get bought out by Berkshire Hathaway.

Next, we've seen positive moves in the stocks we screened so diligently during the market downturn and decided to keep. I've gone with a concentrated portfolio and this has served well since the market stabilized. Besides BNI, my concentrated portfolio includes:

Radisys Corporation (NASDAQ: RSYS) - Largest Position
BNI - Second largest, liquidated
Collectors Universe (NASDAQ: CLCT) Now second largest position.
Visa (NYSE: V) - Liquidated most of this position for a nice gain; Still retain a minor position
Boston Scientific (NYSE: BSX) - New, small position

I'll keep beating the drum on RSYS as it went from $4 to now $10. It was a rough ride but we should be seeing some upside as they outsource their production model and grow with new products.

Collectors Universe is easily my second largest holding and has been on an outright tear and we owe thanks to new management cutting costs and reimplementing the dividend. This has brought investors searching for yield running to this stock. It has seen a run also from $4 to now roughly $14 bucks. A recent increase in the dividend yield now it paying out a whooping 30c a share!!! This healthy dividend allows me to continue to grow ownership in the country.

Visa was a classic buy during the downturn as we began accumulating a large amount of shares at roughly the IPO price. This was a no-brainer as the downside risk could not have been much lower than the levels that analysts had expected for a public offering. So at one point V was my fourth largest position behind RSYS, BNI and CLCT, because I had a conviction that V wouldn't slip much further. After a nice return, I sold most of V but retained a small portion which I still hold.

URB Update: Visa is experiencing some downside risk in their stock due to some recent legislation. The CEO recently spoke about the amendments passed in the Senate and the affects they could have. Being in the industry I need to better understand what's in the potential amendment but it seems like there could be some additional regulation around the "interchange" or swipe fees that are paid by merchants. I do believe this could have the most impact in their bottom line because this is how they make their money on a per transaction basis. I think investors are concerned with this and with the fact that a major part of the amendment is limiting the fees around debit and even credit transactions. This part would only impact V if their issues see a significant decrease in volume.

My recommendation is to wait for this legislation to play out. V and other networks will not be impacted as much as issuers are. Keep the stock if you own it and use the dividend to accumulate more of a position. I will be keeping the small position that I own, however for the tracking portfolio I will take some profits.

Boston Scientific - I like this sector but my research shows that there may be too much risk involved in holding this stock. I may look to stay in this sector by finding a stronger company that offers a dividend.

I am exhausted but here are the stocks that I am still watching:

• Energy Partners
• Legg Mason
• Becton Dickinson
• CapitalSource
• Theravance
• ViaSat
• ADC Telecommunications
• Solar Capital

Back to Business...

If you haven't been paying attention lately it has definitely been back to business on Wall Street. Quietly the markets have roared up and surpassed the levels before the great recession of our times, started. We are roughly hovering around Dow 11000 and I am still interested because good companies are recovering and making money. If you go back in time, you will remember that I mentioned the good times will begin to roll again however we need to be better stop pickers this time around. In the past few years, we could afford to buy almost anything and watch it go up. Now we've learned that this is no longer the case a good pickers will be rewarded. I am not a great stock picker so I will say good and that is why I went through that cleansing period. I said if you don't see a stock as a long term hold and can't bear waiting for it to recover through the difficult times then get rid of it. And that what we did, now I would have loved to go back and hold on to my Microsoft holdings but besides that I was pleased with my focused results.

My main holdings continue to be:

Radisys - my largest position with is up fairly nicely. Since the hitting lows in the 4s this stock along with many others has rebounded and is roughly in the 9-10 range.

Collector's Universe my second largest position is poised and looking very strong. It has surprised be and scared me a bit by bouncing off of levels in the 4s and surprising coming in around $14 lately. I followed the advice of the greats and really read through their filings and statements when things were bad. As I've written in the past, they have a good representation of outside investors who have kept the company honest. They shedded non-performing parts of the business...the gem grading business if I recall and maintained their bread and butter...authentication of stuff. They also instituted expense saving processes and cut the dividend which hurt and sent investors scrambling away. But reading through the filing showed me they could continue to make the payments but wanted to reserve the cash to make it through the storm. And that they did, and when they reannounced a short while ago that they were bringing back their 25c dividend things were rolling for this company. Earnings looked good and I was buying more shares through my dividend reinvestment program. Now my holdings are going up even more and they are soaring. They just announced an increase in dividends which is bringing in more investors and we are loving it. Dividends have been increased to 30c and this company looks to be in a great position. I will need to be careful here but we are easily profitable on this trade and making steady dividends each quarter.

Burlington Northern - This is no longer a holding as we made a healthy return after the company was bought out and taken private.

I watching the usual suspects in my watch portfolio:

Legg Mason (LM)
Boston Scientific (BSX)
...and a few new ones:
ViaSat (VST)
Theravance (THX)

Keep u posted, Peace

Wall Street Gold Medal

Going for gold might be replaced with the phrase 'Going for Phelps' one of these days. But if you are in the financial markets getting your Michael Phelps on has been difficult because the markets have been more volatile than a crazy ex-girlfriend. If you know where I am going with this she's up one day and then flying off the charts the next day in the other direction. The nice thing is I have been picking good girls lately as stocks and I haven't been whipped around as much as others have. If you followed our post just a month ago, I posted the steps to navigate these choppy markets --> http://urbanomics.blogspot.com/2008/07/navigating-choppy-markets.html.

One again the market has had two sharp day to the downside, however most investors feeling the brunt of that pain are people exposed to the financial sector. After recent articles spooked the investment community, investors have been selling off banks and Fannie and Freddie rather quickly. There have been articles that have highlighted that another big bank may go under due to the ongoing credit crunch. Then Barron's pointed out that there is a likelihood that the government may have to bail out Fannie and Freddie which could leave current stakes invested in the government sponsored agencies worthless. All this proves is that financials suck and will continue to suck for the forseeable future. Why people choose to ignore that fact is beyond me. In your 401K plan or in your IRA, I would stick with less volatile investments at this point like the Treasury Inflation Protection Securities (TIPS). This is still a solid pick because the Producers Price Index (PPI) was recently released and again inflation is steadily rising. And in my brokerage account I see myself steadily moving towards dividend yielding stocks, technology, transportation, and infrastructure plays.

And for a quick discussion on some of the stocks in my actual portfolio and/or in my stock tracker portfolio:

Collectors Universe (CLCT) - Although, you may want to smack this company like many others for spending without a conscious, they have announced a strategy to cut back on expenses now that their gem grading business is gaining traction. I hope that this business continues to take off like I observed after reading the last quarterly report and while we wait enjoy the 14% dividend this stock touts. I know the fear may be that the dividend will be cut due to such a high yield, but as long as the payments are made keep 'collecting' and participate in a dividend re-investment program (DRIP) to obtain more shares at these low prices.

Burlington Northern (BNI) - This transportation company has whethered the storm and continues to hold steady. Transports should benefit from the declining oil prices and stronger pricing power. I ain't selling until Buffet does.

Microsoft (MSFT) - Thank goodness the Yahoo mess is over and the world can move on and realize that MSFT is a world class technology company that continues to sit on an unbearable amount of cash. I would prefer that they start to increase the dividend amount so that I can get paid as I wait for great results from these guys. I would take dividends here and partipate in the DRIP.

Radisys (RSYS) - This stock reported great earnings and analysts raised the expected guidance for the next quarter by a whopping 9c! It holds steady on these tough days and usually outpaces the market on good days. It hit a bit of a rough patch after insiders sold in the last few weeks but the downside should ease and this stock should move higher.

EPD, ETE - This is a play on natural gas and I like the pipeline stocks in the future because there is good dividend insulation which should be re-invested for a great long term gain. The yield is around 7% here and is considered stable.

MOVE - This stock has rebounded from the dungeons of $2 after their earnings announcement and will move higher as real estate eventually rebounds way down the line from now.

China Digital (STV) - STV is like an ex-girlfriend and is more volatile than a Jerry Springer show. I think the international slowdown causes this stock to sag and the drop has been sharp. This stock rebounds when the market is positive and does so rather sharply. I would recommend adding to your positions slowly.

AK Steel (AKS) - I believe is still a solid company but get out of the way of the commodities. Its like trying to catch a falling knife and thats not too smart.

EWJ - Great play on the downturn in the international markets, especially Japan.

OPTR - Don't know a lot about this stock which met my screen. It was up sharply then retreated. I don't own this stock but would look to take profits after another quick run up.

See How It's Done...

Then watch me do me. Hopefully I didn't lose you but what I am yapping about is that my plan is to stick to what I know and what I do best. That's keepin' it real 24/7 and my assessment on how to beat the market. I told you that 2008 was in for a rough ride. I still think I owe you a write up about my recession fears for the economy, so I will have to find my notes written on the train sometime and post them. So as usual when the market is going through its rough moments...I usually sit back and get my PAC-MAN on...and that's chomping data day after day to get an assessment on what the heck is going on out there. So for anyone that tunes in I apologize for the gap in postings but thats what I've been doing, camping out in the financial trenches. What do I do for these silent weeks and how can you get in on it:

~ Get your PAC-MAN on with lots of data from newspapers, online financial stories, and economic reports. Recent new stories that you should be aware of:

• More weak data on the economy was just released (i.e., Manufacturing & Economic indicators)
• The price of oil passed the infamous $100 a barrel mark
• Reports show jobs are being lost (unemployment claims are lost), and companies are cutting their workforce
• Gold is breaking through new levels
• International stocks have suffered but have done well on days the US economy is down

~ Pay attention to earnings reports

• Many companies are reporting that as they look through their crystal ball...it ain't looking pretty
• Investors are hammering stocks that report a negative outlook going forward
• The few good companies are getting rewarded for producing positive future earnings

So I try not to panic and reassess what this means to me. And what I got so far is the economy sucks, stocks are getting killed, and "sell the rips and buy the dips" (taken from an analyst on Fast Money on CNBC...I believe Jeff Macke). This has been consistent with my view of the market for the last 3-4 months so I am not making very many changes to what I do...Umma do Me (I'll explain in a sec). But I am listening to the last thing that I have learned and that's sell into positive gains in our stock positions and buy when good stocks tumble hard...and that's sell the rips, buy the dips. This lesson has been learned the hard way this year b/c we've experienced something kinda unusual and that is our companies are not being rewarded for good quarters, rather the analysts are focusing more on future outlooks. Radisys (NASDAQ: RSYS) reported blowout numbers but got hammered because their outlook was not going to be as good. The same can be said for Crocs (NASDAQ:CROX), the plastic flip flop maker. And the last thing I am noticing is that the poor performers are getting absolutely punished. AVID Technology (NASDAQ: AVID), Collectors Universe (NYSE: CLCT), and maybe even Zhone Techonologies (NASDAQ: ZHNE) have all seen death sentences.

Umma Do Me
I plan on doing me by evaluating my current portfolio and trying not to make drastic changes unless needed. I will sell the rips and buy the dips.
Burlington Northern (NYSE: BNI) - Railroads companies are hot, so I am not touching this position but watching it closely
RSYS - Should have sold before the earnings when it shot up to the $14 range. Got hammered after earnings by over 20% and I buying into the dips and creating a new price point @ the 52 week low. I like anything below $10.50 and placed my point @ $10.10
AVID - This stock also was running up before earnings if you recall hit $28, got crushed and saw lows of $17. I have bought in on the dip here and like the range of under $20, especially in the $19 range.
CLCT - Their earnings report was disappointing but I am still confident that private equity will closely watch the direction of this company. Also they have muscled the company into paying a handsome dividend to shareholders. So each quarter we are getting almost a handsome check to offset some of the losses @ almost a 8-10% yield on an annual basis (Most companies yield 1-2%) So buying into the dip will be difficult here. I bought in at $9.50 but recommend $9 or a really aggressive stance here and see if this touches the 8 dollar range.
ZHNE - Gets the heartburn of the year award because just last week it shot up to $1.18 and we were in very good shape. Then in one day the market took 20% cut into the stock. There have been active buys into this stock and if it gets to levels of $1.01 or lower I am a buyer again.

Disclosure: I own RSYS, and rebought RSYS at stated price point, CLCT own and rebought, AVID own and rebout, ZHNE own, CROX I do not own

So people ask what am I going to do, and I keep it simple: "UMMA DO ME" (courtesy of ROCKO):

value="http://www.youtube.com/v/n_hYc6lYE4c&rel=1">

Trying to Catch My Breathe...

Or better yet, "Let Me Clear My Throat". I am trying to catch up to a few things so far. For example, I wanted to follow-up on a previous post and I'd like to respond to a reader's comment left recently and of course I want to drop my personal thoughts on something that I nailed right on the head.

Follow-up to My Previous Post

First thing, is I wanted to briefly follow-up on my previous post that I was just now able to get around to. I really like Radisys (RSYS) at these levels and even in this volatile market...I stray away from posting a new Superman Price, but if I were it would go a little something like this. I am sticking to my original price point of $12.25, but I would Superman RSYS @ $11.85. Hopefully you'll remember some of my writings on price points because as I become better reading charts I really like using these points to determine my buys and most importantly my REPEAT BUYS. My real life example is today my limit order for RSYS filled at 11.85 and that is my repeat buy.

Next matter on hand, China Digital Holdings (STV). Warning, this is a very volatile stock so those with queasy stomachs beware. I will need to continue to monitor this one close but I stick to my earlier price points from my previous post. I bought at $21.50 and noticed quick profit taking at resistance levels of 22.70, maybe 23. Since then I have purchased and sold at the prices described here. And to show that I stand by my points I had a limit order fill today at roughly $21.50, and I will sell again at 23. Note: Although volatile, I believe this will continue to trade in this range for awhile. As noted I have already bought and sold this stock in the range and I will keep doing so for small but effective 5% gains. The first time it took two days to reach my 5% target and today when my 2nd limit order filled, I was please to see that our target hit again on the same day! I will be selling STV, very likely by tomorrow and looking to buy again and continue picking away at the 5% target.



Reader Response

Click here for my Reader Response to: Subzero Mortgage Freeze

That nasty word...RECESSION:

and stay tuned for why I called the recession awhile back!

Disclosure: I own shares of RSYS & STV

Out of Sync...

This posting should be easy. Technically it was written on January 17, but it saved away on another laptop so this is the first opportunity that I have had to post my thoughts. It goes a little something like this:

Yep this year my goal is to sync up my recommendations with the handy little portfolio tracker that you see to your right of my site. This will help you understand how our recommendations are doing. The hard part is that it will never completely be accurate because the market is all about timing. When I recommend price points to you, I go out there and put a limit order to buy that stock, which helps me not have to follow its every move or make spontaneous buy or sell trades.

Limit Trade Definition: Instruction to execute an order for a stock only at a specified price or better. The broker continues the order until a specified date or until the customer terminates it. Assume an investor places a limit order to buy at $10 or less a stock now selling at $11. If the stock goes up to $20, the broker will not execute a buy order; if it falls to $10, the broker will execute a buy order immediately. (Courtesy of allbusiness.com)

Great examples:

Rite Aid (NYSE: RAD) – I recommended selling this stock here on my post but it remained on the tracking tool to see if my recommendation to sell if for a small loss was correct. And that appears to be a good decision, we sold RAD for a loss because we didn’t believe the fundamentals were there and the stock ended up plummeting even further. So that is an example of how the tracker can be used to display my thoughts, even though the losses appear much worse. Don't believe I recommended selling, use the search tool and look for all postings about Rite Aid or RAD.

Radisys (NASDAQ: RSYS) – This stock is an example of what I hope to be able to do from here on out when I recommend a stock. I post it here @ URBANOMICS and then buy/track it on my stock tracking tool. NOTICE, my price point for RSYS is $12.25 and I will place a limit order for this price until it fills (See limit order definition above). However, because the stock tracking tool does not accept limit orders I have to buy it at whatever price is available at the time (which I believe was $12.38).
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

New Recommendation – China Digital Holdings (NYSE: STV) is a BUY

China Digital Holdings (NYSE: STV) This is a great play, where I can’t take credit for finding this stock. Disclosure: This stock was not produced by my stock picking strategy, therefore I don’t have a lot of info which came as a recommendation from a friend who has been following the stock more closely. It’s Initial Public Offering (IPO), or the first sale of a corporation's stock to the public, was last year and it took off. But when the market cooled this stock cooled even faster. So my friend brought the stock to my attention and as my strategy often calls I began reading the chart of STV to identify a floor or resistance level for the stock. An easy floor if you believe the stock will rise and continue to do well is the 52 week low. I researched STV and found that the 52 week briefly brushed $20.64 yesterday and after looking at previous closing prices and intraday lows I developed my price point of $21.50.

Collectors Universe (NYSE: CLCT) – This a stock I have recommended in the past and they offer a huge dividend payout at the tune of 8%. I am re-recommending CLCT at 11.01 to take advantage of dollar cost averaging down, the dividend and potential growth.

Playoffs...

"Playoffs...Don't talk to me about playoffs" is the infamous line in the Coor's commercial by coach Jim Mora. And even though its early in the year you have to treat your portfolio like its the playoffs. Its game time this weekend for the National Football League (NFL) and only the best of the best are around to fight for the title. And this is the approach that must be taken with your portfolio...only the best of the best will be accepted. The current market conditions: the value of the dollar, the credit crunch, the housing bubble, higher unemployment, deteriorating earnings, high gas, and the threat of inflation are just a few of the strengths working against you...kinda like the opponents defense in a playoff game. So the past week has seen me actively paying attention to the market. I gave you Bear Stearns (NYSE: BSC) just a few days ago as a momentum play as James Cayne stepped away from the company. That was a tough day for stocks you could have gotten in BSC anywhere from $71-$77 dollars. At all of these levels you would still be showing a profit at this point. I am not a huge fan of owning any financial companies at these levels.

My formal recommendation is to SELL Bear Stearns. However, informally if you got into Bear Stears near the 52 week low, I would licking my lips and thinking about keeping holding at those levels.

The next thing I recommend at this point is to closely watch analyst revisions and warnings of certain industries and companies. For instance, if you don't understand that the credit crunch is the real deal at this point and that ALL retailers are being affects EXCEPT for your discount and low cost retailers than you are napping on the market and deserve to be invested in index and mutual funds.

My next move this past week was to part with any RETAILERS that I own with a gain. The only retailer that I owned was BEST BUY (NYSE: BBY). BBY was sold for a small profit but this is an retail darling that I would keep a close eye on. As this stock continues to reach low levels and nears its 52 week low I would take our old price point and build in a 5-10% margin of safety. Our old price was 43.95 (need to verify that) and then I would think about buying in. I personally will lean towards a 5% margin because I think people with still shop at BBY for CDs, electronics, video games, and all discount priced electronics.

My formal recommendation, SELL BEST BUY (NYSE: BBY); look for points of reentry later

Lastly SELL gains with limited upside or in industries that will continue to lag the market. The following stocks are formal SELL recommendations:

Maximus (NYSE: MMS) - limited upside here after large institutional investors sold their stakes in the company...I walk when the big money walks!!!

Online Resources (NASDAQ: ORCC) - Sold after it soared to $12 and showed resistance at those levels (this was a nice gain in two months of over 20%)

Supertel (NYSE: SPPR) - I have owned this for at least a couple of years now. It was originally Humprhey Hospitality. Limited upside at this point (nice gain of over 60% in over 2 years)

Remember only go into the playoffs with the best players for your team. Now some of the best players can be guys that have performed in the clutch for you in the past. I say this because I am a believer of this philosopy. Need proof, check out Buffett's additional purchases of Burlington Northern Santa Fe's stocks at levels where he originally purchased the stock. My only wish is that I would have sold this stock (which we bought around $77) when it hit $86 and now we would be in position to buy again. So sell non-performers and hold cash for the Michael Jordan's, Magic Johnson's, and Larry Bird versions of stocks. My FORMAL BUY RECOMMENDATIONS will be a good number of stocks because the market is getting crushed here and I think plenty of stocks will surface with attractive values:

Burlington Northern Santa Fe (BNI) - Buffett's back and so am I love at our old levels of $77

Best Buy (BBY) - This sector (retailers) is getting crushed so wait for proof that the bad times are over and catch this stock, further build in a margin of safety so you can sleep easy at night; consider buy with a safety @ 40, give a hard look @ 42

Maximus (MMS) - This is an attractive stock with mostly buy and strong buy ratings by analysts. The biggest long shot of my buy group; buy at my old post rec price of $29 & 30 dollars.

Online Resources (ORCC) - We loved this stock when the CEO promised he would put up his own money to buy shares of this stock. And we bought around $8.9 dollars a share. Anything under screams BUY

Radisys (RSYS) - Guess who's back! This stock was a 50% gainer for us last year, when we dollar cost averaged our purchase prices on this stock at levels between $10.60-13. We sold when it hit @17 and smiled all the way to the bank. Well it hit my STOCK SCREEN AGAIN, and I will be adding Radisys back to my portfolio. The recent 10 - 15 low is $12.25 and that is where I will set my buy target. This stock closed at 12.19, and with this stock back to my old buy recommendation levels, I am RE-Recommending this stock. I truly don't believe it will test its 52 week low of $10.50 and we have the help of an earnings release in early February that could propel this stock forward.

Zhone Technologies (ZHNE) - I am going to recommend Zhone Technologies and believe that dollar cost buying down at these levels will have positive upside. This has buy a roller coaster ride and hopefully after the short sellers have to recover there will be huge swings to the upside for this stock.

It Must Be Butter...

It must be butter, cause we’re on roll! Now I have to give credit to my boy, Stuart Scott from ESPN who popularized this phrase. Another pioneer who is doing big things, appreciates hip hop, and changed the way we view our television hosts. Now hopefully I can do that for you through this site and on the subject matter of financials (mainly stocks).


~Urbanomics Update ~

Yes sir how did you like the last post where we analyzed Advent Software (ADVS). Just two months ago I told you that this stock, which was already moving in a positive direction, had more room to go. And you know through my investment style all we needed was what I have called a catalyst (Use the search tool to see how many times I talked about catalysts) Now in my short time of watching the market, I’ve noticed that a number of stocks move quickly up or down after a catalyst has been communicated to the masses. That catalyst for ADVS was apparent to a few of us in a number of different ways. Once we found our entry point into this stock, we paid attention to the information that ADVS was giving us through its press releases. I know your thinking, now how hard was that!!! Sorry no magical equation, we just simply paid attention to the fact that ADVS was disclosing through press releases that business was cranking through the roof. In one of their releases ADVS told us that they have developed or enhanced a new product and tons of their clients were signing up to use. Now again, I’m not a genius but this sounds like a solid indicator that their earnings are going to move higher over time, which means the stock price should follow...this was confirmed early through our daily ritual of looking for information on our stocks (See Zacks Newsletter disclosure). So the stock didn’t just take off over night…it was creeping here and there giving us a number of times to buy in at great prices. Remember, ADVS was recommended by URBANOMICS @ 39.25 (click here for: ADVS Recommendation ) and has been up between 15-25% since that recommendation.

But a well known secret that I believe savvy investors take advantage of it was I call the Water Cooler Investor effect. This happens when everybody and their mother get the inside tip from a website, the news, or a friend that a stock is going to do well. When this happens, a catalyst has triggered your Water Cooler Investors to jump on board and we will see huge trading volumes in those stocks. This is what happened to ADVS...it reported earnings (catalyst) confirming exactly what they had told us in press releases for the past few months and when this was discussed in their Earnings Release Conference Call, major news outlets spread the news to our Water Cooler Investors. What was the result, hordes of investors flocked to ADVS and raised the stock up roughly 19% in one day. This was the Leading Percentage Gainer of the Day yesterday and made us all very happy. I will now recommend that you sell ADVS at these levels because while they will continue to grow, the effect of our catalyst will die down in the weeks and months to come.

The perfect scenario is that you own alot of the stock, sell enough to gain your original investment back and some profits, and they play with the house's money. ADVS will be a great stock for years to come but unless you own a substantial amount we can put these gains to better use. I often get the call you show you more proof that our strategy works here at Urbanomics, well do a quick review of some of our recommendations:

ADVS - a return of over 30% in the last three months
MSFT - up 9% today as a result of a catalyst; up 30 since first recommended
RSYS - up 9% today b/c of catalyst; up roughly 5 - 30% depending on when you bought it
BBY - a large value stock that is up 10%
BNI - a large value play that is up almost 10% since first recommended

We also highlight the stock that could do better:
Rite Aid (RAD) - recommended @ 4.45, I still believe in Rite Aid and believe this should be bought at 3.95 or lower to build up our shares in this stock.
Avid Technology (AVID) - This stock was up and could have been sold for a profit; recommended @ 32 and now at 28; I believe that AVID has a longer road to recovery but this stock should be repurchased at levels that approach its 52wk low of 25.55
Adaptec (ADPT) - This one could have been sold for a profit; check the press releases b/c private equity is tightening the reigns around this company in trying to win a board seat. Superman price is 3.23, but nibble at building positions whenever the stock drops below 3.40

Welcome to the Good Life

I go for mine, I got to shine...Now throw you hands up in the sky! This is the third track off of Kanye West's "Graduation" album featuring T. Pain. Now this is the jam, but I am not sure what life Kanye was referring too. It's interesting I find myself not writing as much whenever there is a lot of turmoil in the market. This usually also reflects turmoil in the world, which then reflects itself through the market. Let's see, we have major financial companies, Bank of America, Merrill Lynch, Citigroup, and Wachovia Bank all getting hammered by the weakness in the credit markets and the mainly through the bad investments that were made. Add to that the mortgage crisis in the US which has led to homeowners everywhere defaulting on their homes. All the companies in these areas, which were once living the "Good Life" are singing the blues and laying people off. Then there is that pesky thing called energy...it currently sits at levels that are unthinkable. Oil is reaching levels of roughly 90 dollars a barrel and predicted to continue to rise. Now maybe I am too young to really know what I'm talking about but there has been the "R" word thrown out by some analysts and that would be RECESSION and from what I am seeing in the markets I don't think that some of the whispers are too far off.

I am no mathematician but poor financial markets + bad consumer debt + rising foreclosures + declining property values + layoffs = something is wrong (possibly RECESSION). I am not comfortable with the volatility in the market because as companies are beating earnings or being upgraded they go up and then immediately the market brings them right back down due to all the negative news. Now Warren Buffet wouldn't care because he's in it for the long haul (and he's rich), so for the rest of us that were out there speculating its time to take gains were it makes sense and build on our recession proof stocks...like dividend stocks. I like buying stocks that make products that we continue to buy even when times get tough and I still like technology. You'll appreciate the following updates:

Advent Software (ADVS) - reported positive earnings today; (technology)
Radisys (RSYS) - upgraded by Cantor Fitzgerald, price target raised from 11 to 18 (technology)
Emcore - coverage initated with BUY by Roth Capital (technology)
Burlington Northern (BNI) - reported positive earning (transportation)

They have a few things in common being technology plays and one defensive plays. I think this will be the direction to go for awhile.

Why fly to tech...

Because, I'm like a bird I wanna fly away. That was my best version of Nelly Furtado and it was darn good. I can't go pop so time to get back to the basics. You wonder why previously I said their has been flight. You usually here the statement: "There has been a flight to quality". And all of a sudden the industry that we all have been running away from since 2001 is now the one that we are flying back too now that the financial bubble begins to rear its ugly head.

As usual I try to do the one thing most stock pickers don't do. All the websites and TV shows recommend picks but they don't do one thing that would have been helpful for me when I first got started and that was to recommend great entry prices. There have been a few simple concepts that have made a huge difference in how my returns affect my portfolio. Over the years, I have come to realize that entry price, transaction fees, dollar cost averaging, dividends, and earnings releases/market news have been important in understanding the stocks I pick and how much I buy and how long I hold. I would like to say that I am on the cutting edge by actually recommending an entry price but there is probably someone else out there making a bold leap and doing the same. But even some of my favorites, Jim Cramer, Fast Money crew, and Jim Jubak recommend picks but not exactly the entry price. Jubak probably comes the closest by disclosing he will purchase the stock three days (I think its still three) after he has noted that he will be buying the stock. So here goes my take on good ole' technology:

Adaptec (ADPT) $3.40 – Every portfolio needs a little risk and here is mine. This beaten down warrior blasted through its 52wk low. I see momentum action here that will create a floor and push this stock higher. If this stock every dips back to my recommendation price Superman that stock. I got in at $3.54 and since then this stock has gone up $3.82. It has come back a little and due to the markets negative outlook. I would accumulate at $3.50s if it dips and ride the short term wave to a nice quick gain. Save a little in the tank as this will be a great long term play.
Risk – Medium - High
Time Horizon – Short Term

Advent Software (ADVS) $39.25 – Another area not hit by the credit woes is technology. This company reported earnings in August and sales of their software geared towards investment companies and non-profit organizations grew at a decent clip. With the adding of new customers and management’s willingness repurchase the firms shares when they are trading at a discount, this company will continue to be rewarded for growth and look for an exit point of $45 to $47. My quick update is this stock is volatile and a little patience will be rewarded if this stock gets down back to my recommendation price.
Risk – Moderate
Time Horizon – Moderate Term


Zhone Technologies (ZHNE) $1.10 – Many well known investors note they would probably be small cap traders if they could start all over again in today’s world. And I don’t disagree with them. Small cap gives you the opportunity to accumulate a large number of shares just as a private equity firm would accumulate a large number shares for their investment portfolio of today’s medium and large cap stocks. The practice is to load up on a good thing (most funds hold a majority shares in the top 10 companies) and ride the great returns. But the problem with small cap stocks is risk… or should I say the perceived risk that in one quick swoop your $1 stock can become worthless. The way I recommend playing small cap stocks is find your entry point and give yourself some margin of safety to buy the stock. For example, I have indicated a target price for ZHNE of $1.10, but this is the margin of safety price after I noticed momentum at the $1.15-1.17 range over a month ago. On Aug 16, the death day of the market I got my margin of safety price of $1.10 and rode ZHNE for a few days and sold at $1.20. Well more momentum action is occurring at $1.20. I would say this consistent action should reduce our margin of safety and I would re-recommend ZHNE here at a range of around $1.15 to 1.17.
Risk – High
Time Horizon – Short Term

Ohh and I almost forgot my favorite tech stock of the moment, Radisys.
RSYS - This stock has tested the limits of the faint of heart. Many people watched this stock dip below the 52 wk low and thats when a technique that we discussed above came in handy. Dollar cost averaging allowed us to continue to buy this stock as it fell. The price here would be around the mid 10.80s. The "Superman that stock" price would be where I got lucky and repurchased the stock at 10.50s. If this stock drops to 10.50 I repeat...bring out the 18 Wheeler and jump all aboard. Notice the recent news of RSYS acquiring technology platforms from Intel has fueled a nice rally today. It could have been picked up today at around $11 but the nice upside move is just what the doctor ordered. It was reported the new acquisition will be completed in a little over a month and add around $50 million to the bottom line. Music to the ears of us buyers here at this point in the stock. Look for the completion of the acquisition and if as earnings begin to be revised upwards by analysts covering the stock...get ready for takeoff.

I'm Out....PEACE

Dow take a Bow

Ok maybe more like a curtain call because the Dow Jow industrials has been on a tear. And for the first time ever, the DJ closed above 14000. It was just 3 months ago where the Dow was at 13000, so to put it simply that was a big move. Has this affected our readers here at Urbanomics...you bet.

Urbanomics Flashback:
I'm taking you back to a 2005 article I wrote. What names have we told you to buy, how about Microsoft which hit a 5 year high Don't believe me check out our article here: http://urbanomics.blogspot.com/2005/09/dynasty.html

Urb Homeruns
Check out this list by typing in the name or ticker in the search toolbar on your upper left hand corner and see for yourself how far they have come.

Avid Technology (AVID)
Collectors Universe (CLCT)
Maximus (MMS)

Urb Recent Picks
Our latest picks are in the black and we are seeing great momentum action
South Texas Oil Company (STXX.OB) - This is a low volume stock so like the rides at Six Flags you've got to hold onto your stomach. We've seen this stock dip to $8.95...do we panic, sorry real playa's don't flinch. This closed today at $9.33 and I am looking for company events to propel this stock over $10.
Radisys (RSYS) - Four business trading days ago this stock was at $12.41 and now they have topped $13. With earnings being released on July 26, I am hoping for a great momentum push next week.

Urb Misses
What did we miss this week: Applied Micro Devices (AMD); Intel, the chipmaker ripped through earnings and AMD would have been a great play today knowing that Intel performed well.

Urb Radar
These stocks are on my radar:
Cabela's (CAB)
Starbucks (SBUX)
Rural/Metro Corp (RURL)

Back That Thang Up - Ballin' on Wall Street

Juvenile has penned hit songs like Ha, Slow Motion, Rodeo, and Bounce Back...so in honor of the former Hot Boy himself I have to recommend my "Back That Thang Up" pick and tell every to back the truck up and pick up shares of:
RadiSys (RSYS) Back the truck up on this one. The big time investor David Nierenberg
is talking, so holla at cha boy b/c I'm listening. The activist investor has a core set of rules that he follows when he makes an investment. Similar to my man Warren Buffett he looks for great valuation supported by a margin of safety, a good management team, trends, strong balance sheets, and improving sales. This has led me to RSYS a stock near its 52 weak low but poised to turnaround. The stock is covered by 5 analysts with price targets well above the 52 week low. Nierenberg has been an activist in this company and continues make this an attractive purchase as a 10% investor in RadiSys. Back the truck up and enjoy.

Buy Recommendation: $12.91
Note: I will be adding positions to this stock after my recommendation.

Another stock to watch: TD Ameritrade. There has been a lot of talk about TD Ameritrade and the phrase has been consolidation. There is talk of more consolidation going on in the brokerage sector, specifically online brokers. The potential buyer is supposed to be E-Trade. Shots out to my boy over in Cali working for E-Trade...you might be handling another conversion. Buy rec: $20