Friday, September 22, 2006

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.

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