Day: June 28, 2007

Another Win for the Broad Market Portfolio

Another Win for the Broad Market Portfolio

Well, score one more for my portfolios, Komag is being bought by Western Digital for $32.25/share. This was a remarkably quick win, given the initial purchase back in late March, and a rebalancing buy in late May.

Investments rarely work this quickly, but I am grateful when they do. In the last portfolio reshaping back in March, I put more weight on EV/EBITDA, and Komag scored well there. I’ll be selling Komag at the portfolio reshaping, which should take place in the next two weeks.

I sometimes mention that my investment methods allow me to be away without worrying too much; this closing week of the quarter is one more example of that, at least, so far.

PS — On another note, wasn’t it interesting today to see the market get excited about the supposedly dovish FOMC language, and then sell into the reality that nothing had changed?? I chuckled; people expect too much of the FOMC…

Full disclosure: long KOMG

Begging For A Rate Cut

Begging For A Rate Cut

Just a short editorial comment before the FOMC announcement.? There are many calling for the FOMC to cut the Fed funds rate.? Most of these players seem to be financial players seeking relief in their financial positions.? I don’t hear as much coming from real businessmen arguing that they need cheaper financing in order to survive, and/or grow their businesses.

The FOMC listens to the latter group more closely.? They listen to inflation signals more than both groups, though.

One of the investment implications is that the absence of a rate cut will continue to put pressure on leveraged investors that finance off the short rate.? No disasters now, but the pressure is growing.

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