Epiphany Investing

Searching Out the Optimal Portfolio of “Revelation” Stocks

U.S. Stocks Fight the Good Fight Today, With Several Success Stories

Posted on | October 24, 2008 Time: 10:01 pm |

After seeing index futures crack the circuit breaker to the downside before the U.S. markets opened this morning, the S&P, Dow, and Nasdaq all held their ground through the trading session. Given the intense selling action in global markets prior to our opening, and the unprecedented forex activity between the USD, Yen & Euro, I really thought we’d see every last scared seller hit the market early and often.

Then again, maybe we did. Maybe the “Great Unwind” of leverage has diminished to a Category 1 financial hurricane from a Category 4. And maybe there are enough buyers, bottom-fishers, and auto-buyers out there to fend off a Category 1 storm with buy orders. Volumes today were strong (6B for NYSE, 2.6B for NASD) but not fantastic, so my mental jury is still out on whether we’ve seen the worst of the selling waves.

There was promising activity today in several of my key holdings within the Secular Trends Portfolio. Amgen (AMGN) closed up about 3% after rising steadily off the morning lows. Today’s performance plus yesterday’s strong buying on the earnings numbers have combined to push the stock 12% higher on well above-average volumes. I covered the earnings report and company prospects in depth here, and I like the way the biotech proposition is shaping up.

Similar intraday performance pushed Potash Corp. (POT) to break-even by day’s end, despite the fact that grain futures for corn, soybeans, and wheat all fell today. I haven’t seen that discrepency in quite some time, and it is a sign that long shareholders are finally stepping in. I’ll be writing up an in-depth report of 3rd quarter earnings this weekend, and my initial analysis only solidifies my belief in the share value.

Peabody (BTU) announced today that they are doubling the amount of their buyback program to $1 billion, enough to retire 12% of the outstanding shares at current prices. Shares rose over 10% during the day from the opening lows.

I wouldn’t want to give a totally rosy status update, so I’ll mention one of my blowups in the portfolio, Las Vegas Sands (LVS). Shares were down another 20% today, as each day the credit markets remain frozen Adelson and company are falling further behind on vital construction projects. This ultimate contrarian pick still has tremendous asset value…but the constant worry is that current equity shareholders will have their interests in that value wiped out.

Well, I’m off to pour myself a Guiness, and I suggest everyone grab their favorite version of the same. I’ll be trying, like many of you, to read up and catch my breath after another hectic and exhausting week.

Ryan Barnes

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