PSB Portfolio Update September 2013

| September 19, 2013

September 19, 2013

Is This The Calm Before The Storm?

With everything that was supposed to happen in September, you may have expected a lot of volatility in the financial markets.  But it turns out, it’s been surprisingly and relatively calm.

You see, September is historically known as an active month for the markets.  On top of that, investors had to consider the tenuous situation in Syria as well as the most important Fed meeting of the year.

Regarding Syria, for a while there it looked like an American strike would happen for sure. But, somehow, a direct assault has been avoided for the time being as a diplomatic solution has tentatively been reached.

And that’s not all…

This month’s Fed meeting was supposed to bring about the start of the oft-discussed tapering.  That is, a reduction in the amount of bond purchases made monthly by the central bank.

As it turns out, the Fed hasn’t decided yet to alter the $85 billion per month purchase plan.  While the economy is slowly improving, there are still obstacles to overcome.

Basically, the economy is doing okay but the Fed doesn’t believe we’re out of the woods just yet.  Now, the next thing to focus on is the debt ceiling and potential government shutdown.

Perhaps October is going to be the crazy month this year.  Or, maybe we’ll end up having a calm year all around.

As always, only time will tell.

Position Updates

Please Note:  We don’t necessarily update every open position each month.  We focus on the positions experiencing significant news, notable price movement, or a change in recommendation.  Please refer to the Performance page on our website for our current buy, sell, or hold recommendation for any positions not mentioned in the Update.

. . . . L&L Energy (NASDAQ: LLEN) – Sell

LLEN was a position we were hoping to hold for the long-term.  The stock has shown periods of brilliance.  And, the company is in an industry with astronomical growth potential.

However, LLEN is now the target of a short seller attack.

GeoInvesting is claiming the company is defrauding investors by reporting revenues from idle operations, and has been doing so for quite some time.

LLEN management claims they know nothing of inaccuracies in their financial statements, but the damage is done.  Regardless of whether these rumors are true, it’s going to take a very long time – if ever – for the stock to recover.

Let’s sell our shares while they still retain some value.

. . . . DryShips (NASDAQ: DRYS) – Hold

Our patience with DRYS has finally paid off.  The dry bulk shipping company has soared higher in recent days and is now a roughly 60% winner.

Basically, the dry bulk industry is in the midst of a major turnaround.  Shipping activity is rising and even ship construction is picking up.

Investors are piling into shares of DRYS and other shippers as it appears a dry-shipper bull market could be in the cards.

With the huge move higher, we’re moving DRYS to Hold.  Hang on for bigger profits ahead.

. . . . Aceto (NASDAQ: ACET) – Hold

ACET is the gift that keeps on giving.

Not only has the stock been on fire – trading as high as $17.25 at one point – but the company also pays a regular dividend.

Investors in ACET should have received a $0.06 per share dividend last week.  The recent dividend payout effectively lowers our initial buy price to $7.83.

Plus, the longer we hold ACET shares, the lower our entry point will become.  As such, we’ll hang on to this position.

Action To Take

  • Sell L&L Energy (NASDAQ: LLEN)
  • Move DryShips (NASDAQ: DRYS) from Buy to Hold


Category: PSB Portfolio Updates

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