A portfolio of 8 stock picks from the edge

I made brief mention of how the 8 stocks were purchased on the Performance page, but wanted to provide a full post on the topic. In general, "the bottom" is not an event, but a process. This is true of stock markets and should also hold true for individual stocks. When I decided to begin the 8 Stock Portfolio on August 1, 2008, it was not because I thought the stock market or any of the … read on »

Yesterday morning, Chico's (CHS) reported their second quarter earnings. As a brief recap, net sales decreased 7.1% to $405 million and net income fell 83% to $6.7 million or 4 cents per share. Same store sales at Chico's stores declined a whopping 19%. Usually an 83% decline in net income and 19% drop in same store sales would be taken as a bad thing. However, part of the idea behind the 8 Stock Portfolio is that … read on »

The stock market started off the week going down because of worries about Fannie Mae and Freddie Mac. But the market ended the week going up despite worries about Fannie Mae and Freddie Mac. There's been an almost overwhelming consensus that the common equity in these two companies is worthless and the stocks are going to zero. In my dictionary, "overwhelming consensus" spells "contrary indicator." But in this case, I don't think its worth placing "bets" … read on »

Over the weekend R.H. Donnelley was featured in a Barron's article. The article outlines some of the obstacles which have weighed on the stock, but provides a measure of optimism saying that the stock is a "risky but attractive" way to bet on the continued viability of the yellow pages. The stock responded by rising over 15% today. I selected RHD for the 8 Stock Portfolio when it was $1.47 per share. After today's move it … read on »

Another week of tumultuous action. I heard a video the other day that made an interesting point. Tom Brown from BankStocks.com called for a bottom in financial stocks and said that if you're investing in any sector except oil, you have to believe the same. For example, if you are investing in retail stocks, how could they have seen the bottom if there's more pain ahead for real estate/financials/banks? I've intentionally avoided financial stocks and have … read on »

It's some slightly old news, but I recently read a few articles on VMWare and their new CEO that are worth mentioning. On July 8, VMWare (VMW) simultaneously announced the abrupt replacement of co-founder and CEO Diane Greene and reduced their sales outlook. In response, the stock dropped 24% to around $40 per share. It had long been known that there was friction between Diane Greene and EMC CEO Joe Tucci. Nonetheless, both announcements were … read on »

"Doth suffer a sea change into something rich and strange." OK what happened this week? Sentiment seemed to swing from utterly dismal to resolutely euphoric. Some might call this kind of extreme volatility the sign of a bottom. But whatever the case, I seem to have picked a good week to start the portfolio. Despite bad news on a couple of fronts the portfolio racked up a sizable gain for the week. The first week's performance was … read on »

This post will bring you a recap of some recent news events for stocks in the 8 Stock Portfolio. This will become a regular feature, likely joined by lengthier posts containing commentary surrounding major or notable events. For now, here's the news recap for the week ended August 8, 2008: Whole Foods Market Whole Foods (WFMI) reported third quarter results that were absolutely horrible, along with guidance just as bad, and suspended their dividend. While some took … read on »

And now for the final post in the 20 Stocks Left Behind series. These are stocks that had been selected as initial candidates for the portfolio, but which had been removed in favor of the chosen 8 stock portfolio. Finisar (FNSR) Finisar is a technology company which makes fiber optic subsystems and network performance systems. At a glance the company seems to be increasing revenues at a nice clip while diminishing their losses. However, they are in … read on »

I am going to continue the review of stocks that I had initially selected as candidates for the portfolio, but discarded for various reasons. But first, a few words on the long term plan for this blog. I've already made one post on each of the 8 stocks in the portfolio. These posts provide the general consensus negative view on the stocks and my counterpoints and reasons for buying the stocks. This has been followed … read on »