Seeking Alpha by Adding Beta

First quarter of 2009 is almost over. I thought 2008 was interesting but looking at what we saw in Q1 with S&P reaching 666 and then bouncing more than 20% in 3 weeks, 2008 was relatively calm:-). I thought it would be good time to take assessment of my "stock of the week" recommendations. Here is summary: Dow (-11.40%); S&P (-9.67%) My recommendations in plus: BCS (95%), BCS -D (44%), GE (33%); HUN (3%); IDG (91%); XL (51%) Recommendations in minus: DRYS (-35%); HIG (-22%); OIL (-5%) In all, if one had bought 100 shares of all weekly picks, overall portfolio would be up by about 15%. Not bad comparing DOW and S&P returns till now. Let's see how these picks do over the year Now let's come to this week's recommendation: Symbol : PLD Company : Prologis Buy price : $5.5 to $ 6 Target price in 12 months : $ 9 (for 50% return not including dividends) Context: ProLogis is a leading global provider of distribution facilities, with operations in markets...

Last two weeks have been very interesting for financials. The KBW financial index is up by nearly 38% - it was up by over 50% but last two days of week, it gave up some of its gains. So that poses a question. Is worst over for financials and are they ready to roll. Let's take a look at some recent events and what's coming up in next few weeks: Many troubled banks have started saying that they were profitable in first two months of 2009. This is good sign considering they were making heavy losses in all of 2008. There would still be significant write downs but there is real possibility that banks can earn their way out of the big hole they have dug. If they can just stop making losses, dilution pressure on their stock would be reduced significantly Mark-to-market is getting revisited. With some relaxation (or different interpretation) would significantly help in terms of capital ratios for banks Geithner is finally ready to roll out long awaited toxic assets plan next week. ...

With markets swinging up and down 8-9% with last week showing uptrend (for a change), many folks are wondering have we reached bottom ? It's almost like on a long tour, my kids asking - are we there yet:-) In my opinion, I don't know and it does not matter if we reached bottom or not. Here are the reasons: No one knows when markets and economy would reach bottom. Many folks (including myself - I learned my lesson) called Nov 20 as bottom only proven to be horribly wrong.  Majority of population is still working hard trying to reach end meets and improve their quality of life. With billions of people in developing countries want to join their counterparts in developed countries, they have high aspirations and would keep working hard Policies of governments are much better than seen during great depression and they would pull all stops to avoid another great depression at all costs China and India still expanding (though at lower rates) preventing complete meltdown of global econ...

Another painful week with all indexes losing over 6% in just one week. Those were the times when such moves used to happen in one month or one quarter. With Dow and S&P 500 down by nearly 25%, one wonder 2008 was not that bad compared to 2009. At this rate, it's just matter of time before DOW hits 6000 - I hope it does not happen. I am not going to recommend any stock this week since markets are in down trend and any stock I recommend would be down next week so what's point in buying anything ? Only one reason I would consider buying stock in this market is following: Most of the stocks - pick any say GE, DOW, AA, BAC , BCS , HIG , XL and so on are trading as if these companies are going to vanish in next few months. The stock prices are almost like what option traders used to pay for 6-9 month call options not long ago. So why not buy stock at same price what calls used to sell for.  For example, when GE was over $30, it's c9-12 month call for strike price of $30 woul...

Another down week with Dow almost touching 7000 (if not, it would this week). 3rd bailout for Citibank at expense of common shareholders. What's going on in this supposedly capitalist nation? One lesson I learned from these bank bailouts. It's best to be debt-holders or preferred shareholders (except for Fannie and Freddie preferred) since everyone is out to screw common shareholders. Check out Citibank on Friday. It's common stock (C) fell by 40% while its preferred (C-M, C-P) jumped by 30%. I have started studying (and investing) in preferred for some time but have not been aggressive enough. Here are benefits of investing in preferred over common: They have superiority over common. They would get impacted only after all common gets wiped out Most times, they pay dividend at around 6-8% per annum . At today's prices, they yields could be above 20% when they pay dividends Government is buying preferred when they bail-out companies like C, BAC . So it's better to b...