Asleep at the Wheel

Yikes! I went long NVDA Oct 30 calls for mark-up week and then forgot to sell into strength yesterday morning! Hello? McFly? In about 24 hours the stock has retreated from 31, solidly in the money, to 29. This means a massive reversal of fortune for me... I won't repeat this mistake anytime soon.

More Rebalancing on Weakness

Continuing the trend from yesterday, I'm taking advantage of weakness in some of my holdings to add to positions and continue to rebalance. I've added the following:

* TOL. I continue to like the homebuilders here. Despite lackluster numbers and a downward revision in home sales numbers for last month, they are rallying. It feels like these stocks have nowhere to go but up.

* WFC. It increasingly looks like a soft landing is in the cards. Inflationary pressures are being ameliorated thanks to cheap commodity and energy prices. It stands to reason that financials like Wells Fargo will be the beneficiaries of cheap short-term and long-term rates (core business model and mortgage originations, respectively).

* AAPL. I continue to like Apple Computer, even at these levels. Apple is going to be very strong going into back to school and Christmas seasons. I'm taking advantage of a small pullback to add to my holdings.

On a side note, I unwound most of my GOOG Jan calls at 420... one misstep by these guys and it would have torpedoed my gains for the year. I'm still very bullish but don't want to be the next Amaranth!

Rebalancing into financials

One of my problems as an investor is my tendency to overweight tech just because I know so much about it. I'm very bullish on a lot of tech companies - AAPL, GOOG to name a few. Both of which I own.

Today I'm moving into financials, Wells Fargo (WFC) to be specific. I like WFC here because of lower short-term interest rates and the potential for income from mortgage refinancings and applications as we clear housing inventories. Short-term rates help the bank's natural business model. Mortgage originations will help drive revenue. With the 10 year at 4.5%, people who are in ARMs may choose to go to fixed rates.

Long NVDA Oct 30 calls

This morning, I went long NVDA with a small tranche of Oct 30 calls. My buddy Sam has profited handsomely by calling a bottom in this stock when he was out visiting me the last week of July. He went in at 19 and now it's trading at 30... nice 50% move!

I think there is some near-term upside there as our multiple is only at 33 (I think it will top out at 40). The stock will also run to end of quarter thanks to mark-up week. But I'll be getting out on Wednesday or Thursday. I think the market is too optimistic. These guys are not really as levered to the PS3 launch as people think, and there are still massive supply problems there. They may be a PC play but overall I'm not bullish on PC sales since the PC experience is getting worse and worse by the day.

Wish me luck... the calls are trading at $1.75 as I write this.

scope creep

OK, this was supposed to be a golf blog but I'm going to expand it a little bit. Now I'll be talking about what stock trades I'm making. Because I think people care about it. Below you may find my portfolio as it stands today. I just went long on SBUX and TOL, here's why:

* SBUX. To quote Steve Ballmer, "I love this company!" Starbucks has gotten beaten up recently because their lines at the stores are too long! Talk about the definition of a good problem to have. They are aggressively expanding in markets like China where the upside is huge and saturation is a very long way away. I still think they have room to grow here. I still can't find a seat in my local Starbucks most times. Take the long-term secular growth potential plus the near-term upside from consumer's extra discretionary income from lower gas prices ("consumer isn't dead") and I think you have a winner. Entered at $33.

* TOL. Cramer thinks the homebuilders have bottomed and so do I. Interest rates are coming down and these stocks rallied today on slighly improved revenue numbers from KBHome. They are about 50% off of their peak and most of them trade close to book value. The head of Toll Brothers says he can liquidate all of his land holdings today for a healthy profit. Toll Brothers is best of breed and has a phenomenal brand. The home showcases that they put together are simply unparalleled - check out Desert Canyon in North Phoenix and you will want to sign on the dotted line right there.

Here's the rest of my portfolio:

AAPL Apple Computer, Inc. 73.00 -1.65 (-2.21%)
BMY Bristol Myers Squibb Co. 25.06 +0.35 (1.42%)
F Ford Motor Company 8.00 +0.24 (3.09%)
GOOG Google Inc. 403.78 -3.07 (-0.75%)
MRVL Marvell Technology Group Ltd. 18.87 -0.44 (-2.28%)
SBUX Starbucks Corporation 34.01 +0.00 (0.00%)
TOL Toll Brothers, Inc. 27.81 +0.65 (2.39%)

Note that I am long GOOG 420 Jan calls.

Back and better than ever

Well today I hit the practice range for the first time since my trip back east a couple of weeks ago. My new favorite play to hit balls is up at Angeles National golf club in Sunland, California. Its tucked away up in the foothills about 30 mins away. The reason to go is that you can actually hit off of the grass there. Thanks to Jeff at Firefly for the recommendation.

In any case I was hitting strong and accurate with everything. My nine iron was a nice consistent 120 long and dead straight. Some problems with the driver and I still can't hit a consistently decent shot with the hybrid Titleist. My seven was easily going 150 which I'm happy with (given I'm hitting ancient pings, too).

Also starting to experiment with fades and draws with my sand wedge. Fades working nicely but the draws are a little harder!