Week 19 Performance - Up 1.9%

Week 19
Dow +1.84%
S&P +1.79%
NASDAQ +1.72%
LiveRocket +1.93%

YTD
Dow 5.25%
S&P 4.73%
NASDAQ 4.58%
LiveRocket 6.58%

Since Inception
Dow 7.2%
S&P 7.2%
NASDAQ 6.3%
LiveRocket 16.73%

We are still recovering from the horrible performance of week 18 when we were stopped out of stocks that rebounded and then some AND we didn’t act fast enough to take advantage. That was easily a 15% combined swing.

Jitteriness continues in the market. For example, Manufacturing reports came in and showed strong performance. This is important in light of the potential for inventory pile-up.
Other positives were the job market – very good performance.
But nervousness about the Fed next Monday is dominating the mood.

I continue to rely on the strength of these stocks and look froward to the earnings reports starting next month.

We bought TEVA and then jumped back into TIE and STX. I believe that a surge in hard drive demand will continue as cable companies drive digital set top boxes into the home, and most of them will have DVR capability. We have $18,827 in cash which I want to use. I think AKAM is fairly valued, otherwise I would get back in. I see JLG, JOYG and MDR as tasty.

Of other interest, notice the recent French request of Apple to share its DRM code. I mentioned in a previous post that a key milestone in the fall of Apple would be when Apple is forced to share the iTunes DRM code. After all, if everyone can use the same code to distribute and sell music, then any music library can be used. This is a step towards the commoditization of music and video sharing.
The impact on Apple’s bottom line is slight – iTunes revenue is ~$100M annually. But the path towards commoditization of the iPOD took a big step today.

Also, TIE reported earnings. Wow.
Earnings up 110%
Sales increased 61%
Profits almost doubled the rate of sales - that's a sign of margin strength.
More incredibly, prices increased 39%. And volume production is increasing. Meanwhile, the backlog has almost doubled.
They forecasted a 35%~50% sales increase this year and a 100% earnings increase.
And the stock didn't move.

FINANCIALS
Goldman Sachs had a great quarter, further bolstering the case for financials. I like the way that filtered down to ET but I don’t like the way GHL stayed flat especially after LAZ rose ~8% as well.
ET – Up 8%. So that counters last week’s 5% drop and adds to it. This is a 52 week high.
GHL – Flat after hitting a 52 week high the previous week.

COMMODITIES & EQUIPMENT
GRP – Up 9%, countering the previous week’s 6% drop and adding a bit. I don’t like the way GRP is trending down especially in the face of (1) magnificent financials, (2) continued oil demand and (3) announced increased spending by oil companies in drilling. I think this is very much driven by fears of natural gas problems.
TIE – Up 2%.

HI TECH
STX – Up 1.5%.
MRVL –Down 5% this week. This is ~15% in 2 weeks. I continue to believe strongly in their growth and am willing to wait out its short term softening. There is a general softening towards high tech which I think is a matter of sentiment versus facts.
TRID – Up 3%. They are still close to their 52 week high, so I am not worried.

HEALTH
NTRI – Up 8%, countering the previous week’s 4% drop and adding a bit. I am still a true believer and looking for a strong quarter. But we have a ways to go to get back positive
TEVA – Up 1%