Monday, July 10, 2006

Going nowhere fast

Portfolio has been vacillating around the $4,000 mark for the past two weeks. Only good position has been SLW. Everything else has either stayed put or gone down. I added a new position in XLNX - today - total speculation based on low RSI readings. Yehyeh brought it to my attention - and I am thinking it may bounce a couple points here - but who knows.

The only position in the portfolio that is worth commenting on - due to the sheer idiocy of its price strength - is Avalon Bay Communities. If any one has any firepower left - this thing is the SHORT of a lifetime. It is a REIT yielding less than 3%. It is rallying right now based on takeover spec as some stupid Australians just paid top dollar for a retail REIT. Here is all you need to know about REITS - there are two drivers for valuation - 1) yield, 2) NAV appreciation. Part One is a no-go as treasuries are paying risk free 5%+ and this thing is yielding less than 3%. Part Two is a no-go as property prices are beginning to decline. This stock is MANIPULATED - over 95% institutional ownership. If I bounce back at all here to near the $7,5000 mark or $10,000 mark in the portfolio - I will be heavily short this thing again.

I am still looking to finish in the money as the CPI and PPI numbers are coming out next week and I expect high enough readings to trash bond prices and drive yields up. That will further destroy the argument that the REITS offer an attractive yield. Short away.

Sorry for the rant.

Regards,

BG

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