Its been a busy week with multiple market cross currents. One of my favorite Hedge Fund managers, Doug Kass is calling for the US stock market to make its annual high this week. As much as I admire his call of a lifetime last March, my guess is its a losing battle to fight the market highs at the moment. None of my analytical models are screaming “sell” in fact Lowry’s opinion is getting stronger for more upside momentum.
But its September and in the past 20 years only 40% of Septembers have been positive. Its debatable as to why September is the worst month of the year, it may have to do with the end of the fiscal year for the mutual fund industry. Funds tend to sell off their losing positions to offset and lower the capital gains obligations of their shareholders.
But we’re sticking to discipline and selling off previous mentioned RINO International RINO. RINO has fallen sharply in our proprietary ranking system to the point where we can no longer own it in portfolios. Green and Socially Responsible Investors often get maligned for looking at “Green” companies through rose colored glasses, but that is not the case with us as I have no qualms selling a holding with over 100% gain. Besides China is tightening monetary policy which makes me wonder the chances of their repeating the mistake the FDR administration made in 1938 by cutting back monetary stimulus before the economy could firmly stand on its own legs.
We’re adding to our domestic holdings including Atlantic TeleNetworks. This is an interesting undervalued cell phone service provider. Verizon and Vodaphone were forced to sell off holdings which was just the kind of windfall ATNI was waiting for. These lines were instantly accretive and revenues are expected to jump by approximately 250% and earnings by over 100%. Estimates at present are running at $5.76 for 2010, not bad for a stock that sells for 8x earnings despite the recent run.