Meeting Summary for April 22, 2009

1) Spreadsheet is updated http://spreadsheets.google.com/pub?key=p4P2Qbq7qqC1UZpy1VImeAw

2) Tim's recommended websites http://www.financialsense.com and find Chris Puplova's commentary. Read them all at your earliest convenience. He has many charts that tell many stories you don't see in the regular media. Also, listen to the MP3's of his father Jim Puplova discussing trends, conversations with authors, etc.
Chris' comments http://www.financialsense.com/Market/cpuplava/archive.html
MP3's from their site: http://feeds.feedburner.com/fsn
David Tice on 4/25/09 is a great listen.


Thanks to all for coming and sharing your views and opinions. I strive to make it the most interesting meeting possible for me, which I hope will continue to translate into the same for you. There is so much potential from a group to make great decisions, and I am happy to offer a bottle of fine wine for the next winner with the best pick. I hope everyone has a big month. With 2 Citigroup long ideas and 2 or more SP500 short recommendations, we may have a very balanced month, and that is fine.

3) We pulled up a website www.mrci.com and pulled up a chart of the US Dollar Index from the following page http://www.mrci.com/pdf/charts.php (OR COPY & PASTE THIS INTO YOUR BROWSER)

4) We also looked at the high correlation of markets over 181 days also listed at this site - http://www.mrci.com/special/correl.htm (OR COPY & PASTE THIS INTO YOUR BROWSER)

5) We missed hearing directly from Tim Allabashi and how he sees the Australian Dollar doing better than the US Dollar because he feels the Aussies didn't get themselves into the same mess financially as we American's have. I hope we get around to you at the next meeting Tim Allabashi! We want to hear your ideas.

Review of ideas:

Ken McCue chose to short a rally in the ESM9 futures up to 870 (using Tim's 3 range stop). Target 760 & 750. Also go long at those two levels targeting 950 and 1000. Risk once long from 760 & 750 is the big question. How many R (avg ranges) do you wish to risk on that position?

Jim Sullivan chose to sit aside, but had the sense that crude oil would stay in a range from 35-50 for awhile now that the speculators (those who were long) appear to be out of the market. We could discuss selling options with a limited risk strategy at the next meeting as a way to profit from Jim's observation. Google "IRON CONDOR" to see that is selling a call spread and a put spread to take in premium, but to prevent a run-away loss if the market makes a run.

Ed Katz sees the market in a holding pattern until fall, then a rally. Thinks Pepsi (PEP) is a buy. They report earnings on May 16. (Tim's note - nice chart in that it is different from most other charts and seems to be at a support level at decent valuation too).

Tony Sanfilippo thinks it is a good idea to go short the Chinese market by buying the FXP exch-traded-fund which is double-short. He would like to protect profits by trailing his stop by 3R once a 5R profit target is reached.

Stan Katz sees the current administration's tactics as a negative and sees a market break into this October/fall and that people are "carried away with Obama". The money they are throwing at the banks is a bad thing. Short the Dow Jones Industrials.

Miriam Bakker had to depart prior to sharing her idea about airlines long vs Dow Jones short. We look forward to hearing more from Miriam at the next meeting. (This position is not in the portfolio as it needs to be aired to the group)

Pamela Grayson preferred to sit on the sidelines again while she formulates a great idea for us.

Robert Daries is bearish on stocks of insurance companies with write-downs as a main concern. To pick a value stock with potential though he chose Proctor & Gamble (PG) as a long against a short-sale of Sysco (SYY) the food distributor.

Ilene Rogers is also not a fan of what the Gov't is doing and thinks that interest rates will be much higher in the future. She admits she is afraid of fighting the Fed here but thinks we'll need higher interest rates to attract buyers to get the auctions done. 1 trillion to 2 trillion is a lot of new money to raise in a year. Buy TBT which is a double-levered etf that goes up in value when Treasury Bonds (20 year) fall in price.

Kueun Choi is a bull on Citigroup due to its Gov't ownership and likely continued support from the Gov't to keep it afloat. Buy Citigroup on Thursday's close 4/23 to buy just in advance of the release of the "stress test" results. $1.75/sh stop loss please.

Rick Jaffe saw an opportunity to own JAVA (Sun Microsystems) shares at a discount to the $9.50 all cash offer from Oracle. With the stock at $9.16 there is a small profit sitting there and there is a chance that another company may pay up for JAVA. (Tim's note, maximum 10% of our $1 million in any 1 stock)

Peter More (spelling?) joined the group and shared his concern about the overall stock market. He recommends selling short the SP500. He sees a retracement of the recent rally that will send the market down.

Kempton Coady recommends Citigroup using a $1.00/sh stop loss. He also says the Gov't will not let it fail, so you can overlook the fact that Citigroup may be bad fundamentally (or even insolvent). Kempton mentioned he had already timed an entry into Citigroup on the long side after seeing the trade set up with near zero borrowing costs with Warren Buffet in agreement, a toxic asset program was in the works and Bernanke in full support. Nice job Kempton - feel free to post ideas directly to this BLOG next time :-)

Mark Juviler suggested shorting the EuroCurrency and going long the Agricultural etf DBA.

Tim West passed on buying silver (a big mistake already) despite many side-comments from the crowd ---- and decided to establish a trading strategy for the S&P500 instead. Tim suggests buying 1R dips in price, risking 3R from there and exiting at a 1R profit. Then repeat the process. This method will do well in a sideways or choppy market, which is likely after such a strong, directional advance that the market has had since the 25% gain from the March low.

The meeting ended at close to 9PM and we look forward to seeing you again next month.

I didn't get around to bringing my new dart board and darts in to pick a random portfolio - and I didn't nail down the date of the next meeting, which I'll assume with be the third Wed in May. Remember, the winner gets a bottle of red or white fine wine from my collection. I'll bring 1 of each - the winner can choose.

Last month the winner was Channing Allen with his Home Depot & Target longs. He surmised that the employment situation wasn't as bad as most had thought and that there was upside potential in the market. Nice job Casey - on your 2nd WIN!

Feel free to post any replies to this commentary or email me directly at twest@compocapital.com

Cheers!

Tim West