It's A Long Way Up the Mountain: Iron Mountain

Iron Mountain (NYSE: IRM) was a recent recommendation that we've highlighted. Look back (using the search bar) at previous posts and you will see that we watched this stock as it violently fell to new lows and eventually hit a 52 week low, its lowest point for the year. We swooped in during these turbulent times and made solid calls to buy this stock as it was nearing a these lows and as we felt there was enough of a safety margin to begin buying. Once bought you must remember one of our fond URB Lessons Learned:

URB LESSON LEARNED ~ Monitor your holdings for underlying data that either 'supports' or 'rejects' your reason for buying the stock.

If there is evidence to reject your reasons for buying the stock, then while is hard to part ways you must dump the stock.

Recent Data from Iron Mountain:

~ Quarterly Dividend was raised 200% from 6c to a whopping 18.5c!!
~ Recommended by a well know investment analysis firm
~ The most recent earnings beat the estimate of Wall Street...and this has been the recent trend
~ And they have raised future earnings expectations. My experience is firms don't do this unless they believe those numbers will be reached

The dividend increase and the rise in future earnings are excellent signs to support our recommendation.

Dec 21 2010: Technology Stock Recommendation

There is a technology stock that has shown up on my radar for some time. I often do my research and wait until it hits my price targets that I think are critical. Because any stock may be worth a BUY at the right PRICE.

I'm transitioning to my new format where I will alert you all here of the recommendation. And then I will release the stock at a later time after I've had an opportunity to reach out to any that sign up for my new service. Stay Tuned!!!

Stock: ******
Technology
Software and Programming
Small-Cap
Hint: Penny Stock that appreciates the IPhone

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

American International Group (AIG)

On a positive note today, we saw the shares of AIG rocket up 14%! As you have noted, we have recommended and are still bullish on AIG. The skinny:

~ AIG plans to repay the Federal Bank of New York

~ AIG is selling key assets, like their Asian life insurance, unit to drum up cash for repaying their loans

~ The market is reacting positively because it begins the process the US Treasury converting their shares to common stock

~ On the heels on GM, it LOOKS more feasible that the government may find receptive investors that want to snap up shares on a possible turnaround story

While there is still more room for this stock to run up, we have had a nice move here. I think with the developments highlighted above, this will DEFINITELY be a mainstay for my portfolio going forward with strategic buys going forward.

Tax Cuts...Yes or No??

I am a market guy but I must write here in this article that I am surprised about how often every issue that the administration embarks on is severely attacked. The rule of thumb is you have reached a good level of compromise on Wall Street or in Washington when you pass a bill that has both sides of the debate a little unhappy. So my perspective of the Tax Cut debate is simple. We've officially reached the level where we have too many whiners and not enough leaders. Especially ones that will tell the truth. In my opinion, President Obama has done a decent job of navigating the water of a highly politicized atmosphere and prime example are the tax cuts.

This deal and its timing are both solid! First both people on the left and on the right are complaining, check. Second, unfortunately since you can't believe the moving lips of many in Washington listen to outside people. I'll listen to Mohamed El-Erian, CEO of Pimco, who has a great perspective on the markets. He points out that the market is headed in the right direction and even increases his overall outlook for next year, DUE to the actions of the White House. The tax cuts are extended for every for the next 2 years and while that may not be the smartest move for the deficit, the KEY element for also extending the cuts for the top 2% (which is what the Republicans want) was getting a series of main street and business tax cuts that STIMULATE the US economy going forward. Tag on the extension of unemployment benefits and this may truly be a multi -pronged jolt that our economy needs to beef up growth. Look at the reaction of the markets...they are responding well hope, now lets hope us folks on main street feel the shock. To be fair, he notes two main themes are the results of a higher outlook:

Fiscal Policy - This would be actions led by President Obama on tax cuts, which contain many parts that will stimulate our weak economy.

Monetary Policy - This would be the Fed's QE2 money printing policy which juices the markets.

This is a great move by President Obama to turn the political posturing into an economical bang for our economy.

QE2 is like a Pay Per View Fight...

Quantitative Easing part 2 (or QE2) is the Federal Reserves attempt to stimulate the economy through the printing and purchase of roughly $600 Billion dollar's in bonds. The Fed has two primary responsibilities and that is achieving maximum employment and price stability. So we've all been watching closely as I'm personally curious as to how this latest experiment will turn out. Of course, if you're the Fed you probably don't want to hear me calling it an experiment. This is why the discussion of the Fed's actions have been much like a prize fight. There are many economists that have pulled out the punching bags and are calling the Fed's actions a waste of money, devalues the dollar, and wishful thinking. Oddly, the Fed has openly punched back and noted that their actions are to jump start a stagnating economy which continues to lead to high unemployment and very low inflation.



Well the Fed's buying has begun and I have honestly been paying attention to the war of words a little too much. I got a little jittery as their has been more volatility over the last few weeks and I got to portfolio watching. But at the end of the day, I believe the Fed will get what they are looking for and that is more velocity. I think the move is actually to get the average investor that has been hedged (like me) or burned (like many) to move from their large bond positions back into stocks. As you have seen my writings here I believe that this is the gradual approach to take. I don't think you go crazy and just remove your bond positions but you begin to reallocate away from this great trade over the past few years. The other thing that may happen with more money in circulation is higher inflation. Well I doubt that will have a serious immediate action because if you're still thinking like me I am waiting for retailers to continue to drop their prices or they aren't getting my dollars. If I have this perception, many others do and the threat of inflation is real but not coming right away. Note...if it does we are slowing building a portfolio that has exposure to TIPS and commodities which will do well against inflationary pressures.

Note: This article was started in Nov and finalized on Dec 09

All that Glitters...Might be Gold, Silver, Platinum, and Palladium

I have to admit I am big on Glitter right now. And I am not referring to Mariah Carey, who may have done an album and movie with the same title. I'm taking about the glitter of shiny metals. You know the metals that coined the phrase Bling Bling in the hiphop world. Don't believe me check out the old Cash Money Record artist BG who had a huge song that turned this phrase mainstream.

But back to my purpose for writing this article. My goal is to point out that it appears we have been fairly right about the direction of the economy and how it keeps chugging along. This is a slow and steady chug that has been scary because at times it feels like we could fall back to those dreadful days of 2008 & 2009. I struggled back then with identifying exactly how to setup and reallocate my portfolio for the future. If you recall I was in the camp that the economy was really bad and I even made the drastic decision to pull the string on all risky and mediocore stocks in your portfolio. The fact is they never should have been there but thats another story for another day. My guess back then was to increase your exposure to the following investments:

~ Gold (through ETFs)
~ Treasury Inflation Protection Securities (commonly known as TIPS)
~ Dividends

Well it was arguably a good call back then but the hard part for me was actually finding out the best ways to take advantage of this strategy. I have been very slow outside of identifying the obvious which is through ETFs. So I am going to place more of an emphasis on the identifying which stocks can help fulfill this strategy.

These asset classes are important because the Federal Reserve is acting to stimulate the economy which is suffering from limited core price appreciation (inflation) and job losses (9.6% unemployment, 17+% underemployed). Because politicians won't stimulate the economy the Fed realizes that someone must. They shouldn't be the only game in town because they don't have all of the tools...like say calling for a tax cuts or passing a huge infrasture bill. So their best solution is to flood the economy with CASH. This does a few of things:
1. Makes holding safe cash investments less desireable; stocks and riskier assets will rise
2. Supposed to make banks lend more because interest rates will be low and attractive
3. Make American made goods cheaper and easier to export as the DOLLAR loses value

Where I plan on exploring:

Hard Assets - Not just Gold but silver, platinum, palladium, real estate tend to rise in value and the dollar loses its value. These are stocks I will be exploring more of:

• Glitter ETF (GLTR) - Gold, Silver, Platinum, Palladium
• Barrick Gold (ABX)
• ENSCO (ESV)
• Cheasapeake (CHK)
• Agnico Eagle Mines (AEM)
• Mariner Energy (ME)
• Ultra Petroleum (UP)
• Interoil (IOC)
• Platinum Groups Metals (PLG)
• Plains Exploration (PXP)
• Gold ETF (GLD)
• Gold Miners ETF (GDX)
• Petrobras (PBR)
• Suncor (SU)
• NovaGold (NG)
• Cobalt International Energy (CIE)
• PetroHawk (HK)
• Abraxas Petroleum (AXAS)
• Vale (VALE)
• Allied Nevada Gold (AMV)
• Exxon Mobil (XOM)
• Gammon Gold (GRS)
• Minefinders (MFN)
• ATP Oil & Gas (ATPG)

TIPS - no change here, this was a good call and inflation, while low now, should increase. Don't believe me check the FED minutes where they outright said they are looking for higher rates
Dividends - I like the recent stocks CLCT, IRM, RSG, EPD and other solid dividend plays.

As you can see I've got some work to do to find value for the future. Peace