“The Happy Noodler”
November 7, 2006
Security Shares Origin Price Cost Current Price Current value Gain or
ICF 300 96.20 28860.00 94.08 28224.00 <636.00>
.IKILF 3 4.00 1188.00 5.10 -1530.00 <342.00>
.NEMKI 4 1.00 -389.00 1.05 -420.00 <31.00>
.ICVLN and .IKILF are listed above and replace the options we bought back. Please note .ICFKS that we bought back was incorrectly listed last week as .ICKKS sorry for any confusion.
Dividends and Interest
Portfolio Gain or
Portfolio Value $101,507.31
Last Tuesday, as we mentioned, we received a market top indicator. This particular indicator was the was very strong but has moderated some since that time. While we were not anticipating a recession at this time, the FDIC raising the bank deposit insurance rates a more that expected 7 basis points puts that likely hood farther up our scale. We are expecting a downturn in the market and we will let our indicators tell us when it is finished. We also expect the bond yield curve to continue to invert farther. If you want a very good explanation of the yield curve go to http://www.smartmoney.com/onebond/index.cfm?story=yieldcurve . Prior to the current inverted curve, there have been 11 inverted yield curves since WW Two and 10 of them were followed by recessions and bear markets. The 11th was followed by a market downturn and slowing of the economy that didn’t reach recession status. This past week we received both sell and buy indicators, but with the market top indicator we decided to go on the side of caution. We have two stocks that respond to overall market conditions significantly, FXI and ICF, so on Friday we rolled (bought back our out of the money options and sold in the money positions) our options for these stocks down to, in the money positions, that will further hedge against losses in those positions. The deeper in the money the position is, the greater the hedge, but the less potential gain if they go up. In our Trader Portfolio that we hope to set up someday we would have sold these positions instead of hedging down. But in the Investor Portfolio we have taken positions that we intend to hold for the long term and enhance through options.
Since the only investing some do at this time is in a 401k, we will set up a 401k portfolio next that could be followed in almost any 401k plan. Keep in mind these are model portfolios and not investment advice. If they do well and you decide to implement any part of them please understand you do so at you own risk.
On the home front, I am over most of the side effect of chemotherapy and feeling much better. My son Joshua and his girlfriend are expecting little Josh sometime in the next two weeks. Yvonne made them a really cute matching baby blanket, diaper bag, and car seat cover with an “animals of Noah’s ark” theme. This is the blanket.