Sold CLF

I sold out of my Cliffs Natural Resources (CLF) position this morning for $71.00 a share, as the net profit margin is narrowing. It represents a $16.30 per share loss from the $87.30 purchase last August. CLF is in a commoditized industry (steel), so it was not a pure Buffett play.

This loss speaks well to my decision to go back to college and invest there in an economics degree.

Bought NYX

I have a gut feeling that something positive will develop for the merger prospects between NYSE and Euronext-Deutshe Borse, even while the European Union balks at the merger. At a p/e ratio of 9.9 and with longterm debt of 3 times net income, I just see too much potential for either a merger or in independent operation going forward to stay on the sidelines. These companies have a monopolistic control of stock trading, either way.

The current ratio is only 1.04, but the business doesn't need tons of cash to operate, as I see it. While I'm stepping a little out of my comfort zone, I'm buying a position in NYX and will continue to see what happens in the coming days and weeks before buying more.

Found My Singing

I found some songs I sang in 2012: GeneChapmanSings.blogspot.com

Sold out Medtronic (MDT)

Due to a decreasing projected net profit margin for Medtronic (MDT) in the "Value Line" presentation, I sold out the remainder of my position this morning for $36.51, plus a small commission. This represents a tiny profit of about $1 per share.

I continue to be concerned about inflation in the money supply, so gold (GLD) is an option I will always keep on my mind in a world with central banking (5th Plank of "The Communist Manifesto") in the hands of politicians.

The Path to Freedom

I just purchased Tolstoy's, "The Kingdom of God is Within You" (one of Gandhiji's central studies) "Sophia Tolstoy's Autobiography" and a book on Mahatma Gandhi's dealings with his Tolstoy's Farm Experiment. If a non-violent path to end Keynsian-Marxist enslavement exists, it will be in Tolstoy's Farm concept to live outside the rule of governments.

I went ahead and bought a position in Corinthian College (COCO) for an average purchase price of $2.09 per share. I sold out half my Medtronic (MDT) position at $34.95 per share, an $0.80 per share loss in order to take advantage of the COCO opportunity. I'll be buying more, as the stock drops and hold where I am, if it continues to climb.

A Picture of Phil Fisher

I spoke to Mr. Fisher twice on the phone in the 1999 at age 91, as he neared his last day on earth in 2004. He was the author of "Common Stocks and Uncommon Profits." Mr. Buffett says that he is "15% Fisher" and "85% Benjamin Graham."

An Interesting Development

One of the worst investments I ever made was in Harley Davidson (HOG), back around the 2008 crash. The thing I learned was that when Net Profit Margins are projected to narrow, you had better pay attention to getting out of one of these Holy Grail approaches I take, until the stock reaches a 70% discount to Working Capital, or Net Quick Assets, which ever calculation is available. I made a killing on General Electric (GE) later on with this new educational insight.

Corinthian Colleges (CDCO) is in one of may favorite industries, Education. It is trading at $1.87 per share with a Working Capital per share of $2.35. If it gets to a 70% discount to Working Capital, I'll buy a bunch of it; if not, I'll skip it.

Cliffs Natural Resources

I just checked out the September "Value Line" presentation for Cliffs Natural Resources, and it is booming right along, even while the stock price dropped to around $50 a share. The Net Profit Margin is projected to widen and earnings expectations are moving upward from the previous presentation. This may be one of those rare deals where we want to hold it beyond the 100% pop, as it appears to have an economic engine without visible end.

Market Dive

Well, the market is taking a big dive today. I suggest that the Fed's announcement yesterday of a further purchase of US debt ($400 billion) in their "twist" is evidence that the US is grasping at straws. Our debt has caught up with us, and now all the stuff I've been railing against is coming to pass. Glad I focussed on a Welding degree and a Motion Picture degree over the past two years. I have options that I would not otherwise. Get ready for the Great Depression II.

Gene

Christian or Gandhian

I was just watching a PBS special on the "Pentagon Papers," and I began to contemplate a Buffett axiom that in order to be a great investor, we must first be absolutely honest with ourselves.

In that vein, I have been troubled with my Christian background since the reading a few years ago of a book entitled, "Jesus, Interrupted," by Bart D. Ehrman. I can no longer defend the pretense that Christian Truth is equivalent to Gandhian Truth. There are real problems in Christian Truth that are quite subjective and quantifiably errant, and I will allow the above described book speak for itself. Gandhi stated, "I worship God as truth only." I do believe that there exists a spirit about the universe that is both math-centric and truth-centric. This spirit seems benign, other than to say that there are laws based in math and cause-and-effect truth. This is what drives me into the study of economics. I must conclude that I am no longer to be classified as Christian but Gandhian: "I worship God as truth only."

Gene Chapman

CFA

I just requested clarification on taking the CFA exams. They propose that in January, 2011, one must present an International passport in order to sit for the exam. I asked if a religious exception is made for anyone, as I am too committed to my world view to throw it utterly to the wind, just to take a test (see: Revelation 13:16). This world is becoming too hard to navigate in a religious context, I fear.

Today's events reminded me of why I went to school for the host of off-the-grid degrees I hold and pursue. Maybe auto repair is a better investment for the years ahead, but I imagine that economics will be of use no matter what doors the Global Marxist government may close.

S&P Downgrades US Debt

Well, it's a first in United States History, I understand. Standard and Poor's downgraded the US National Debt from AAA to AA+. I cannot imagine that this will put upward pressure on stock prices, so I'm glad I'm working a job so i can buy stocks over the next year or two.

I was looking at my opportunity cost of the Welding Degree I finished in May, and I'm $85K in the opposite direction I could have been in had I kept working those two years. Also, had I put $30K in Crocs in 2008 and just walked away, I'd be well on my way to my first million dollars. Funny how life turns on such small dimes.

I'm still pushing for an economics degree to carry through my investing the rest of my life. I guess you'd say that I've entered the "Gravy Phase" of my life. It's all "building up wealth" from here.

Gene

I picked up shares of Medtronic (MDT) for $35.75 a share on yesterday, as the market responded to the failure of Congress to fix the National Debt problem.

My Economics degree continues, as I push toward a Ph. D. in Econometrics way down the road. I'm Pi Theta Kappa Honor Society, Physics Student of the Year and Welding Student of the Year at the Community College I just graduated from, and now I'm trying hard to stay at the big university without financial support from outside. Education is the best investment; they can't take it away from you. I'm 30 hours from Law School, my university advisor tells me, but I don't want a "Dispute Resolution" degree; I want an Economics degree (69 hours). Its' hard stuff, but the Ph. D. is only attainable via the math based BS, MS and then Ph. D. My credibility as a thinker on monetary matters in the years ahead requires a Ph. D. in Economics and a CFA, and nothing else will substitute.

New Horizons

Well, I've finished a Welding degree (Pi Theta Kappa Honor Society, Physics Student of the Year, Welding Student of the Year) and a degree in Motion Pictuer Production, and I'm now on a BBA Economics/ Pre-Law Major at another university her in the Dallas area.

I today bought shares of Cliffs Natural Resources (CLF) at $87.30. Following is the research I did last night:

Here is an interesting situation, although I'm not a Financial Advisor yet, so what you do is your business. There is this company, Cliffs Natural Resources (CLF). It's a mining company but carries a double digit Net Profit Margin, so it has monopolistic dynamics working for it. It's in Value Line's main presentation, so it's big enough to have tested management. It has a Current Ratio of 3.35 (lots of cash in the bank); even a Current Ratio of 2 is acceptable. It lists a Net Profit for 2011 of $1.78 billion against Long term Debt of $2.7 billion, meaning debt can be paid off within a year or two with earnings alone. The p/e ratio is listed at 6.6, with an expanding Net Profit Margin from 23.6 in 2011 to 23.8 in 2012 and had a Net Profit Margin of 19.4 in 2010. Stocks should range between $130 to $260 a share over the next year, assuming no downward changes in the Net Profit Margin. Current price: $86 +/-.

Money for Summer College

Dear Diary,

I sold off shares of Decker Outdoor (DECK) for $135.49 a share on April 13, 2010, a substantial profit from the $$$$$ buy price on $$$$$$.

I also sold about half my Gold Spider (GLD) position for $113.50 a share today to get funds for summer college classes, as I invest in myself during the economic uncertainties of the 21st Century.

Gene

Up 19%

Dear Diary,

I'm up 19% overall on invested capital in my investment activities.

Also, I sold out my Bare Essentials position for $18.11 a share on January 28, 2010 after an expected sale of the company for $18.20 a share was announced to close by March 8, 2010. This represented a 125% gain on the original buy price months ago.

I've been reading some of Benjamin Graham's ideas on the inablilty of gold to hold its value in his book, "Storage and Stablity." Hum.

Gene

Buying DECK, KCI and BKE

Dear Diary,

I bought shares of Decker Outdoor (DECK) at $103.26, based on a projected expanding Net Profit Margin in the "Value Line" presentation from 12.7% in August, 2009, to 13.3% presently, to 14.29% for 2010. The p/e ratio was 12.45 yesterday, about as high a p/e ratio as I would ever want to buy a stock.

Shares of Kinetic Concepts (KCI) were purchased at $38.32 a share, based on a projected expanding Net Profit Margin, as well. The NPM was 12.0% in the August, 2009, "Value Line," 12.5% presently and 12.7% in 2010. The p/e ratio was 9.98.

Shares of Buckle (BKE), one of the best run companies in the world, were purchased at $29.83 a share, based on a projected steady Net Profit Margin from 13.7% in the August, 2009, "Value Line," to 13.7% presently, to 13.7% for 2010. The p/e ratio was 10.87. This brings the average buy price to $29.02 a share.

Gene

Sells @ Working Capital

Dear Diary,

I just sold out my PERY position at $14.90 a share, based on Working Capital of $14.70 a share. The buy price was $7.11 on April 27, 2009.

I just sold out my SBSA position at $0.78 a share, based on Working Capital of $0.56 a share. The buy price was $0.18 a share on April 27, 2009.

I just sold out my AGO position at $22.24 a share, based on Working Capital of $21.23 a share. The buy price was $13.60 a share on May 11m 2009.

I just sold out my CTHR position at $1.14 a share, based on Working Capital of $0.91 a share. The buy price was $0.4689 a share on September 9, 2009.

Gene

Bought GLD (Gold)

Dear Diary,

I returned the monies I took out for living expenses earlier this year to zero out my taxes for 2009, as they relate to my Roth IRA.

I've been investing in a college degree this semester, so my stock activities are slow. However, I did take a substantial position in gold (GLD) today at $115.79 a share. I think the gross spending of our Marxist (Republican and Democrat) government should lead to hyperinflation in the real economy, so gold provides the safest hedge against such foolishness. And the education I'm seeking in a broad number of fields that can translate globally can provide assurances of food on the table in the years ahead, should my views on the collapse of the Untied States Government from its present form prove true.

Gene