February - May Trades

NO TRADES

January Trades

January 8 2008
Buy 200 Countrywide Financial (NYSE: CFC) $5.50

January 14 2008
Buy 1000 Countrywide Financial (NYSE: CFC) $6.00

Buy 35 Sears Holdings (Nasdaq: SHLD) $88.00

January 23 2008
Buy 800 Countrywide Financial (NYSE: CFC) $5.25

Buy 100 Ebay (Nasdaq: EBAY) $26.50

Buy 100 Cadbury Schweppes (NYSE: CSG) $43.75

Buy 200 USG Corp (NYSE: USG) $31.50

Buy 200 Cisco (Nasdaq: CSCO) $22.50

Buy 150 Intel (Nasdaq: INTC) $18.75

Buy 300 Mueller Water Products (NYSE: MWA-B) $7.80

December Trades

December 26 2007
Sell 100 Lehman Brothers (NYSE: LEH) $65.00

Buy 50 Moody's (NYSE: MCO) $36.00

Buy 20 Sears Holdings (Nasdaq: SHLD) $101.00

Buy 100 USG Corp. (NYSE: USG) $35.80

November Trades

November 20 2007
Sell 200 Electronic Arts(Nasdaq: ERTS) $56.00

Buy 75 Centex (NYSE: CTX) $19.25

Buy 150 Pulte (NYSE: PHM) $10.25

Buy 50 Moody's (NYSE: MCO) $36.00

Buy 200 Countrywide Financial (NYSE: CFC) $9.00

Buy 25 Sears Holdings (Nasdaq: SHLD) $110.00

October Trades

October 18 2007
Buy 100 USG Corp. (NYSE: USG) $36.00

Buy 20 Sears Holdings (Nasdaq: SHLD) $132.00

Buy 25 Cadbury Schweppes (NYSE: CSG) $50.80

September Update

For the month of September the Model Portfolio’s return was 0.1% versus S&P 500’s total return of 3.7%. For the Fiscal Year ending September 30^th, the Model Portfolio’s return was 16.9% vs. S&P 500’s total return of 15.6%. Since inception, the Model Portfolio's 2-year return through September 30th, 2007 is 36.2% vs. S&P 500's total return of 24.2%.

We made no changes to the portfolio in September. Meanwhile, housing related stocks including Sears Holdings (Nasdaq: SHLD) were hit hard in September dragging down the Model Portfolio’s performance for the Fiscal Year. Consider that at the end of August the Portfolio was outperforming the S&P 500 by 4.9% for the trailing 11-month period.

Earnings season is right around the corner. Perhaps Mr. Market will be so kind as to provide us with a few fat pitches.

September Trades

NO TRADES

August Update

For the month of August the Model Portfolio’s return was 2.6% versus S&P 500’s total return of 1.5%.

August was turbulent for the markets to put it mildly. The S&P went on a roller coaster ride and based on an intraday low was down to the tune of almost 6% from its July 31^st close. We raised more cash by exiting out of the Tyco spin-off companies and divesting ConocoPhillips (NYSE: COP) and Anheuser-Busch (NYSE: BUD). The Tyco companies should do well in the long run. But our thesis of buying the single stock prior to the spin-off had played out. In hindsight, we should have liquidated our position immediately after the split. Conoco had performed tremendously in the short period of time since we bought it and we will maintain our exposure to oil through Diamond Offshore Drilling (NYSE: DO). Finally, a cash infusion of $50,000 gives us more flexibility in building new positions or adding to existing ones without having to trim or altogether trade out of existing positions on a continued basis. Of course if we are not able to invest this cash, it will hurt the portfolio’s performance going forward. It should be emphasized that the goal of building a concentrated portfolio will preempt us from using this new found capital to add new positions without considering the opportunity cost of holding onto existing positions.

The subprime debacle presented us with great entry points into several stocks on our watch list. Moody’s (NYSE: MCO) was a new addition as well as Lehman Brothers (NYSE: LEH) and Countrywide Financial (NYSE: CFC). Please see Margin of Safety for more comments on these companies. Another new addition is Cadbury Schweppes (NYSE: CSG) which we have written about in the past. Worries about the disappearance of private equity bidders for the drinks division depressed the stock to levels too attractive to pass on. We also continued to add to our positions which have housing exposure in one way or another.

On the earnings front, Morningstar (Nasdaq: MORN) and Expeditors International of Washington (Nasdaq: EXPD) came through with stellar results. Morningstar is trading near all-time highs. Expeditors touched a 52-week high but could not sustain it and was probably caught in the market downdraft. CEO Rose did not disappoint and continued with his colorful commentary in the quarterly press release: "This quarter's results once again illustrate that steady growth is reliant upon both consistent and fundamental execution. We experienced good solid growth in all of our major geographic areas," commented Peter J. Rose, Chairman and Chief Executive Officer. "When Yogi Berra said, 'It ain't like football. You can't make up no trick plays' he was speaking of baseball, but he might just as well have been talking about the global logistics business. Indeed, there are no 'trick plays' or short cuts that can bail you out in this game. When the final box scores are published in this business, those who have attempted to rely on either have typically found themselves thrown out at home. While the spectacular, but intermittent, long-ball game may garner the headlines, it's the more tedious, but consistent, short-ball game that takes home the trophies," Rose said. Our kind of CEO.

August Trades

August 1 2007
Sell 75 ConocoPhillips (NYSE: COP) $81.00

Sell 100 Intel (Nasdaq: INTC) $23.40

Buy 150 Moody's (NYSE: MCO) $52.50

Buy 100 USG Corp. (NYSE: USG) $40.00

Buy 300 Mueller Water Products (NYSE: MWA-B) $13.00

Buy 50 Centex (NYSE: CTX) $35.00

Buy 100 Pulte (NYSE: PHM) $18.00

Buy 50 Home Depot (NYSE: HD) $37.00

August 15 2007
Sell 150 Anheuser-Busch (NYSE: BUD) $48.00

Sell 75 Covidien (NYSE: COV) $38.00

Sell 75 Tyco Electronics (NYSE: TEL) $33.00

Buy 50 USG Corp. (NYSE: USG) $36.50

Buy 50 Centex (NYSE: CTX) $32.50

Buy 100 Pulte (NYSE: PHM) $17.00

August 16 2007
Buy 50 Centex (NYSE: CTX) $29.50

Buy 100 Pulte (NYSE: PHM) $15.75

Buy 200 Mueller Water Products (NYSE: MWA-B) $11.90

Buy 50 Moody's (NYSE: MCO) $45.00

Buy 100 Home Depot (NYSE: HD) $32.5

Buy 50 Expeditors International of Washington (Nasdaq: EXPD) $43.50

Buy 100 Lehman Brothers (NYSE: LEH) $50.00

Buy 125 Cadbury Schweppes (NYSE: CSG) $42.25

Buy 300 Coutrywide Financial (NYSE: CFC) $17.00

Buy 25 Sears Holdings (Nasdaq: SHLD) $129.00

August 31 2007
Buy 200 Mueller Water Products (NYSE: MWA-B) $10.85

July Update

For the month of July the Model Portfolio’s return was -2.8% versus S&P 500’s total return of -3.1%.

It was a tough month for the markets. It was the right time to jettison Chaparral (Nasdaq: CHAP) and CBS (NYSE: CBS) and raise some cash. Chaparral will be taken private and CBS had rewarded us nicely since we purchased it post spin-off from Viacom. Finally, we sold out of Tyco (NYSE: TYC) choosing to hold on to Tyco Electronics (NYSE: TEL) and Covidien (former Tyco Healthcare) (NYSE: COV). Tyco should do well in the long run but with a 14% gain, this was a good chance to raise some cash and let the other Tyco businesses provide us with the upside.

We used a portion of the proceeds to continue to build our positions in USG (NYSE: USG) and Pulte (NYSE: PHM) both of which were dragged lower as a result of the sub-prime and housing jitters. Sears Holdings (Nasdaq: SHLD) lowered its earnings guidance for the second quarter and announced a $1B buyback. The stock's decline from it's high was a good opportunity to add to our position.

Earnings for many of our companies began to trickle in throughout July. No major surprises. the homebuilders continued to struggle and Diamond Offshore's (NYSE: DO) results were stellar. Ebay (Nasdaq: EBAY) tried hard and continued its buyback program but Mr. Market was not impressed. Intel (Nasdaq: INTC) was also shunned as analysts zeroed in on lower than expected margins for the quarter. Still, the company maintained its guidance for the year and is looking for a strong second half. Meanwhile, its rival Advanced Micro Devices (NYSE: AMD) is reeling. Corning (NYSE: GLW) is also worth a mention. Results were just fine but again investors chose to focus on slightly weaker telecom sales and management's reluctance to raise LCD sales guidance for the year. Meanwhile, this is a company executing a beautiful turnaround and rekindling its innovation machine. What we are focusing on is Corning's reinstatemant of its dividend and announcement of a $500m share buyback.