Small Time Blog

2016 Market Melt Off, Hooray!

by Bradley Voight on 01/27/16

The new year has brought on massive profit taking in the broader market! After climbing the 8 year wall of Obama worry, large institutions are cashing in for the next phase of the economic expansion or China is having an asteroid sized hard landing and we are all doomed! I have stated on here before that I am an optimist, even though I could get burned for my tendency to look for the good, so I am sticking by my view that this is an economic expansion that is not over in the US or China or India for that matter. I am staying with and even expanding positions in the Smalltime Model Portfolio. I have branched out to my first international fund in my IRA.

Pessimism is rampant in the marketplace and the Fed is sticking by the December decision to raise the federal funds rate by 25 basis points (rising rates usually mean economy is good). How could the central bank be so wrong and Wall Street so right? The commodity pitfall seems to have leveled off with oil regaining the $30 handle and Copper stabilizing above $2. Long term rates are falling with the 10 year US treasury cliff hanging at 2% (a function of the demographic trend of aging baby boomers)

I'm staying with my notion that the economy in the US continues to expand. Alcoa CEO Klaus Kleinfeld stated in the companies' recent quarterly earnings call that 2016 would bring record aluminum demand. How is that when everyone keeps saying the sky is falling? Over 17 million vehicles were sold in the US last year, a new record. Who bought them? Who in the hell are all the people stuck in rush hour? I always say that the glass is half full for me and it is going to stay that way until some knocks it from my hand and spills it.

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Smalltime Model Portfolio Update (9/12/2015)

by Bradley Voight on 09/12/15

Here is a stock by stock rundown of the SMP. The portfolio has suffered a 50% + drop since it's inception so why do I still own the companies?

Revolution Lighting (RVLT) has just secured the rights to bid on Department of Defense contracts. Robert LaPenta, The CEO of RVLT has created one company called L-3 communications (LLL), He bought 10 divisions of Lockheed Martin and made further acquisitions to build a large company geared toward supplying the defense industry. RVLT is in the LED lighting business and Mr. LaPenta is following the same model as LLL. He first bought Nexxus lighting in November of 2012 and has since bought at least 5 other lighting companies. The Department of defense is a place that Mr. LaPenta knows well and he is well known by the DoD in his own right. Mr. LaPenta and his team also hold 57% of the outstanding shares. I'm sticking with this company for the long haul.

Capstone Turbine (CPST) I said from the start that this company and it's products are all about the future 5-10 years out. I am waiting for the costs to come down on the product and am also anticipating new products like a grid-scale turbine for large power plants. Capstone's products have had millions of hours of run time in the field and have proven themselves as reliable. There are many applications for the turbines and they will begin to bear fruit for the company in the coming years. I'm holding here too.

Frontier Communications (FTR) This is the only dividend payer in the portfolio currently earning $21 per year in income. I like this company because it has built out a rural network that is valuable to a larger company who may want to own the network. High speed internet is expanding and Frontier is a big player in the space. Wish I had bought more shares and traded off the peak at over $8, but I still like holding this one for a few years.

Anadigics (ANAD) This is the dog of the portfolio and it has suffered an amazing fall. I knew that this was a turnaround play and that it was a big risk. I still like the fact that the company has no long term debt and the products it makes for the RFID and WIFI infrastructure markets are in demand and will continue to be for years. I'll go down with this ship or I'll sell for a tax loss but I'm compelled to hang around at least into the first quarter of 2016 to see if they can get this thing turned around.

Metallico (MEA) This company makes lots of money, but there are loads of long term debt here. I bought this company expecting a rebound in base metals prices. What I got was an oil price crash dragging the base metals along with it. I did buy more shares @ 34 cents and it is now at 59 cents. I am still way down as I bought in near $2. This company could be bought but I hope not. I'll stay around for 2016 or until we get swallowed up by a bigger fish. Metallico has been bought for 60 cents a share. I will receive $120 for my 200 shares.

Patience is what it takes to endure heavy downturns in the stock price. I am investing in companies, not stock prices. I know that I am an amateur investor and I cannot know what professionals and insiders know, but with money that came from the trash, I believe it is worth a shot.

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Craigslist Ad: Curb Alert Invest-able Capital!

by Bradley Voight on 05/31/15

A "Shocking Number of Americans have no retirement savings" is a head line on CBS moneywatch. I have been shouting from my blog since I started it in March of 2012 these bullet points

Metals fill the curb sides of every neighborhood in every city every trash pickup day.
Metals are actually free money in disguise masquerading as rubbish.
If you have a garage and a few extra trash cans, you can stockpile $200-$500 worth of metals even at currently depressed metals prices.
In the time you are wasting watching re-runs of CSI: Des Moines, you could pick up some metals.
I've picked up $1450+ worth of metal in very, very little of my spare time. What if there were 100 people who did that and pooled the money ($145,000) into 3 high quality dividend paying stocks and 2 speculative companies with growing revenues?
Scrap metal money is dead money never to be realized if it hits the landfill. There are literally millions and millions of dollars thrown away every day disguised as hideous trash! This is real money, just as real as the cash in your pocket or the balance on your debit card.
The internet is actually a free information machine where an average person has vast knowledge at the click of a button on virtually every subject, but in particular, investing in public companies. There are HUNDREDS of sites that are totally free and full of very useful knowledge.
There are no excuses for having no savings, even if you have large debts always save even if you can only afford $20 a month (I could find $20 worth of cans at 1 liquor store in a less than a week) GET STARTED NOW.
Start out by using scrap metal as a mini emergency fund. Before I go to the savings account for 1-200 bucks, I go to the scrapyard with some of my stockpile.
Churches, students, community organizations, all can make money from metal recycling. Someone in your church, community, etc. works in finance. Get them to manage a 8 to 12 stock portfolio of high quality dividend paying companies or invest in a low cost S&P 500 index fund. Universities have endowment funds, why couldn't your neighborhood form a trust fund? A neighborhood investment trust (NIT) community endowment run pro bono by an investment professional from the community? Just a thought of mine.

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Scrap Metal Prices Stuck in Neutral

by Bradley Voight on 05/31/15

It seems like an eternity 5 long years of stagnate base metals prices and just when the economy seemed to be picking up steam, a currency reset and subsequent drop in oil prices took the wind out of the rally in metals prices. I am an optimist, which might just be me whistling past the graveyard, but I continue to believe that economic growth is accelerating in the U.S. and that bodes well for base metals demand. Price is the real indicator of demand though, and if the price is not rising, demand is not rising and that frightens me because central banks around the world are lofting stimulus and ultra-low interest rates out there like 50's something soft ball league pitchers yet no one seems to be swinging at any real investments in infrastructure or revenue generating projects. Instead, the loads of liquidity are pouring into equity markets and corporations are floating bonds at these historically low rates to finance stock buybacks! Until a large scale rebuild of our crumbling water, road, port and airport assets is undertaken, economic growth will remain slow and the risk of another cash-out in U.S. stocks will remain on target for October 2016, in my opinion.

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Happy 6th Birthday Bull Market!

by Bradley Voight on 03/09/15

On March 9th of 2009 the clouds lifted and suddenly the storm was over for US equity markets. After hitting a low below 7000, The DJIA turned tail and, suffice a few hick ups, we've been running with the bulls every since. All good things must come to an end but I've gone on record here on the Smalltime Blog saying that the macro business cycle hit a low in 2008-2009, a low marked by the second longest manufacturing contraction since 1948. What I see is a world where everything is old and needs replaced and I see corporations flush with cash. The impending rise in interest rates is going to drive projects from blueprint to reality because any large construction project will cost more at higher rates, so I expect and am already seeing in my locale, a boom in commercial construction. If oil is to stay low, it is only a tailwind for US businesses and consumers.

Do I expect to be here next year with seven candles? Yes I do but with this caveat: no major unexpected moves out of Russia. If the world is a poker deck, Russia is the wildcard. The Middle East is always on the radar as a potential flash point. Each year we get closer it seems to the whole region blowing up and with the fast rise of ISIS it is more precarious than ever over there.

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