markets

Well its been a rough month in the markets thus far. I watched many banks melt and then come back some after falling. BAC, BMO, and WFC were the ones i watched closest.

If i had a few more dollars to spare i may of bought calls on some last week, but it is now too late. I have some spare cash, but that should be put to work shortly by my wife and her furniture shopping for our new house.

What little cash i did have i used to average down on t.CGS and N.CLCT ($2.50 and $7.50 respectively) which was prematurely early as both fell further.

I had to laugh when Citi group 'beat expectations' by only losing 2.5 BILLION! this quarter. Wow how many businesses can say we had a good quarter cause we only lost a couple billion?

I am contemplating on selling out some of BVF if it gets up over $12. I could also write covered calls on the remaining shares. I fear that after the next vote for the new board it will still be the old board. The market is telling us this isn't good because last vote shares fell after it was announced who won.

I personally like Eugene's board better than the current slave proposed. Seems to have less risk in the new alternative.

Two other companies have come to my attention from reading the many blogs, articles and sedar/edgar reports. WLP-N seems to be popular with the larger Value guys (Buffett, Klarman). UNH-N is in the same sector and equally beatin up.

Refiners VLO-N and SUN-N have fallin 50% in a short period and oil is now dropping. Refiners can't lose money for too long. Eventually prices will catch up and these might be good picks.

CUS.UN-T got below $4 briefly and still has a good yield. GCI-N has a similar chart to CGS-T and appears to be going bankrupt (according to the chart). This sector is getting hit bad with all the recession fears flying around.

I hate to break the bad news, but we've been in a recession (in US) for a year now and possilbly longer. Canada appears to be heading that way, but likely not as bad (hopefully).

I watch all sectors in order to try and bottom fish for some 'cheap companies'. LUN-T ($5.09) and BWR-T ($0.35) seem to be two that are distressed right now. For different reasons. LUN has aquired many companies and is trying to swallow them still. BWR is just not getting its costs in order and needs to improve margins.

Besides health care companies which continue to drag lower some consumer goods companies are feeling the pinch. One bright spot is K-N which seems to be on an uptrend? SBUX-N has been on a nice slide, and oil companies like TLM-T have pulled back far more and faster than the price of crude.

For a longer term play one might look at CCO-T in the mid $30's or PWF-T below $30 and write covered calls. Both are attractive for differing reasons, but may provide some good yields in a poor market (yield= dividend + call premiums).

DH