November 2007 Market Timing Update

"There is a very easy way to return from a casino with a small fortune:  go there with a large one. "

~Jack Yelton

Personal Portfolio Other than being faced with the prospect of going up to the Yukon, again, October sure was a bang-up month. I closed the month with a weighted YTD average of 19.76% for funds held the entire year and an average of 17.35% for everything. This is currently beating the pants off Bob's portfolio which is showing 14.19% for aggressive growth, 11.97 for long term and 9.23 for the retirement portfolio. I finally dumped STSVX in favor of PDPPX, a recent large cap addition to the 401K which actually looks like a pretty decent fund. 2.1% gain  YTD just doesn't quite cut it. This has increased my Large Cap US holdings to 28% and Small Cap US has decreased to 3.5% Owens Corning (OC) Owen's Corning had their third quarter conference call. They seem to have had a pretty good quarter all in all.  Losses in some sectors and gains in others. Their CEO is retiring. I liked what they had to say but I lightened up a bit a while back. I sold half of my position in Owen's Corning a couple weeks ago for what might be a better opportunity: Wireless Ronin (RNIN) It started looking like a good time to buy back in to Wireless Ronin.  The stock dropped to the low 3's and that looked like a good buy-in point to me. The company stock dropped after less than expected earnings results and it looks like it is bottoming or has bottomed. The company had some pretty decent headlines the last couple months. I noticed none of the institutional and mutual fund holders have sold or reduced their positions.  It will be interesting in seeing if this company continues to gain traction. Their earnings results come out Thursday, November 8.  I think I will say three Hail Marys Wednesday, November 7.   Here is the conference call. Prediction for the Final Two Months of 2007 I think the market will close 2007 at record highs and here is why: It starts with the 60 Day Put-Call ratio, which is staying at record highs. The higher the reading, the higher the amount of overall negativity, or bearish opinion in the market.  What does the Mass Media focus on and what are you bombarded with on virtually any channel? Negativity - it is pervasive. I used to kind of like CNBC but anymore it makes me gag, what with those fresh young faces reading off questions from a teleprompter to their guests and being unable to ask any meaningful follow-up questions or present a cogent argument to the contrary when they get some geek on from the Doom and Gloom crowd crowing "The Sky is Falling! The Sky is Falling!". I guess that will be fixed one of these days with a AI teleprompter. That way the show hosts won't have to think at all. I finally flipped the channel off when one of the show guests made a reference to condiments. Noticing the blank look on the host's face, the guest said, "You know, salt and pepper?" Jeesh.   Getting a little off topic here. Earnings in general have been stellar all year. Inflation is low and the economy is chugging along in a positive direction. Lots of people are making lots of money. Now, suppose you are an institutional investor who has bought into all the negative rhetoric over the last year and you have the bulk of your client's assets in the relative safety of bonds.  You finally lift the shades and notice a number of your competitors are doing considerably better than you. Your performance is going to be published at the end of the year along with everyone else and the results for you are going to look rather embarrassing. Best to buy back into the market and at least make it look like you had a clue for part of the year. Institutional buying will further push up stock prices and barring any new catastrophes, people who stayed in the market for the entire year of 2007 will be wearing watermelon smiles on New Year's Eve. As always, do your own DD and if I haven't mentioned it before, there is a fair amount of Irish in the family so I do enjoy a little béal ónna.