roy

School's in, folks. The markets continue to teach me expensive lessons.

I recently bit the bullet and dumped my underperformers at quite a heavy loss (I'm still up, though!). Yahoo!, after rebounding on earnings, decdied to start sliding down again. I decided to bite the 5% loss and just sell it off. I recently bought Cogent before earnings; my due diligence showed a promising company with low debt, steady earnings (in a lumpy contract market) and a promising industry (biometrics). What I didn't understand when buying was the market sentiment - apparently management doesn't care squat about the investors. The conference call was very weak, and I decided that although I'm still bullish on the long-term prospects of this company, there's no reason to tie in my money for 3-6 months before next quarter (3Q/4Q shoudl show lots of promise). I took a 15% loss (I didn't put in a stop-loss because I'm a moron). It's on my watchlist, and if it's still hovering at $16 about 4-5 months from now, I'll considering buying back in.

Another big lesson I learned was from PCU. I bought in at PCU in the early 90s and was expecting a huge earnings report from them. Their earnings, last week, was incredibly dissappointing. They reported lower income, no end in sight for the strikes that are affecting production. What bothers me more is that they continued to pay an astounding $2.25 dividend on lowered earnings. I have to imagine that GMEX (the parent company) is trying its best to pillage the cash hoard of PCU before the Peruvian presidential elections (with both outcomes looking as bad as the USA's past presidential election). PCU also entered into forward contracts for copper production at $2.80, which means their profit line isn't going to benefit from an increase in copper spot prices.

Not to mention GMEX is making a lot of noise of selling the company ... it just does not seem like solid fundamentals to drive the company for the next year.

So naturally I sold out at about $96. I was happy to walk away with money. The next day, I seemed vindicated when the price dropped down to $92.

Then it started going up. And up. All the way to $100 (today). It astounds my mind. How can a poor quarter and poor future quarters be buoying the stock? I'll continue to track PCU closely and see if I can learn my lesson from this.

Unlike PCU's earnings report, NXG's earnings report yesterday night was spectacular. The only downside was reporting the consensus $0.10 EPS, but things that are showing promise:

• They unhedged the price of copper, so they should be able to take advantage of these spot prices when selling
• They've lowered the net cost of the gold they mine
• Further efficiencies in their stripping costs should improve margins (unlike PD)
• They continue to pay off their debt (unlike PCU)
• Vast upside from Young-Davidson mine and Kemess North
• No political instability (it's a Canadian company!)

Here's to upside :)

So currently I'm holding TD, NXG, B, BTSE, and EWW (I bought this in solidarity of my Latino brothers). Let's hope my re-aligned portfolio will perform better :)