Friday, May 16, 2008


On an intraday basis, we just went over a half million U.S. Dollars in net worth ($US503k or $A535k). Hopefully, we can hold onto it. We are also at an all time high in Australian Dollar terms, exceeding the previous peak, last August, of $A527k. We are still 1/2 a percent below the peak in terms of Australian Dollar investment returns. We're up about $US85k from mid March. After reaching another of our annual goals I'm going to only raise the goal to $US505k, which just assumes that we hold onto our gains and save the retirement contributions from Snork Maiden's employer that we will receive in the remainder of the year. I project that if everything goes to plan we'll reach $US550k, but I'm not going to make that an explicit goal, as everything might not go to plan.

Snork Maiden asked me why we are gaining so fast after months of going down hill or struggling. The main reason, is of course, that the stock market is now going up - i.e. luck. But there are also two important things that I did - switching most of our bond holdings to stocks in March and early April until we had an effective 125% exposure to the stock market - and buying or holding onto a bunch of listed funds that were and still are trading way below book value. Those funds are beginning to return to book value.

In other news, Beazer released their last two quarters of earnings. Though they again lost their entire market capitalization in those six months, the accounts are not quite as bad as I thought. They can still go for more than a year at this rate before wiping out all their book value. They have $277 million of cash at hand at the end of March and will receive cash from asset sales in the near future. And finally, they renegotiated terms with their lenders that means they will not be in violation of their covenants - they delayed the earnings until these negotiations were complete... In after hours trading the stock went up a few cents. If it doesn't go down on Friday I will sell my puts.

As mentioned above, the market continues to stun confused bears and trade up and up. I'm currently projecting a pullback starting on Monday or Tuesday, but I doubt it will be significant. In fact I suppose the market will just keep on going until the old highs from October 2007 are again reached.

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