Jim Cramer has always said, its not “buy and hold” but “buy and homework.” Too many “investors” do not know what they own when they buy a stock, which is just reckless, but I don’t think its completely their fault. Most people don’t now how to do proper research, or have the background to understand how to do it. Even my friends who work at mutual funds often ask me where I get my info for the analysis I put on this site. This is why I started SuckingLess.com - an investor research and education magazine/community.

SuckingLess.com is a collection of the best industry and company websites to learn about the companies you own. When you own a stock, you’re, in a sense, an owner in the company. So, you should at least understand the basics of the business or industry, which means you should probably read what someone who works in that industry would read. Still, this ISN’T you’re actual job and making it so would be too time consuming, so I’ve also tried to filter SuckingLess.com to have only the most relevant and easiest to understand websites.

I want SuckingLess.com to be a COMMUNITY, a tool for ALL OF US. So, I invite everyone to come and participate on the site, SUBMIT your favorite research resource to help others learn the way I’m trying to get this started with my own favorite bookmarks. Please RATE the sites you’ve used before to help others know what’s most useful, and leave comments on how you’re using the sites or anything you’ve learned. Again, to help others. I’m sure you’ll learn something from the site, so give back a little and share your investing knowledge and experience with us!  Sometimes its not immediately obvious what you can learn from a website, so give people a little insight too if theres a special way you’ve found to tap into the markets with a certain website.

For example, I don’t have many resources on financials, healthcare, or retail/discretionary because, as readers of this site you know, I focus on industrials, tech, and energy sectors. So, help me learn a bit too!

Finally, PLEASE PLEASE send me feedback on how to make the site more useful to you. This is a tool for all of us, so lets make this what WE need to do the best research. And get your friends and trading buddies to help build SuckingLess.com too. Thanks and hope this is what we all need to become better investors, i.e. Suck Less!

P.S. 90% of mutual funds underperform the markets…so sucking is not something to be ashamed of. We just have to suck less as we learn more.

Wednesday’s Barron’s article “Other’s May Catch GE’s Industrial Disease” cites Goldman options strategists John Marshall and Stuart Kaiser recommending clients to buy puts on the Select Sector Industrial SPDR (XLI), a ETF that’s supposed to track the industrial sector. The recommendation was to buy XLI June 36 puts, which was trading around $1.10 while the XLI was trading at $37.37 at the time of the article. Marshall and Kaiser’s report cited the following reason (which I think is totally ridiculous):

“The GE earnings miss and guidance revision last week highlights how the increasingly weak macro environment can quickly sneak up on even the most diversified and well-run of industrials businesses,”

I would actually be buying calls in specific industrial names and have Honeywell (HON) and Union Pacific (UNP) calls on my book for the past 2 weeks.

My biggest problem with this recommendation is the XLI is about 18% GE (making the XLI basically a lite GE play), its kind of late to buy the puts AFTER GE took that dive from $37ish to$32ish! And why did GE take that big plunge? It sure wasn’t because GE is an industrial. It was because we found out GE was more of a financial than an industrial where GE’s financial unit took GE’s earnings per share down by 7 cents and negated any positives the industrial units were producing.

None of the other components in the XLI has any financial units like GE (hence they’re true industrials, unlike GE). After listening to GE’s call, one should actually be bullish on export industrials. Read the rest of this entry »

Finding my comfort zone. Restructuring the portfolio to suit my strong point. Not trying to run a diversified portfolio. I’m not running this for retirement. Its a specialized fund in science, engineering, and technology. Most picks here are for the long term, looking at supercycles of 7-14 years that will dwarf the credit crisis we have now, which is already making Paul Bunyan look like a baby (much much bigger, and hairier).

1. Union Pacific (UNP) - Weak dollar. Lets keep exporting stuff! Maybe some lead back to China? Just kidding. How about just some POT(ash).
2. Potash Corp. of Saskatchewan, Inc. (POT) - If you saw how excited the CEO was on Fast Money talking about the potential growth, you’d think he was smoking some. Perfect explanation of the growth: once people taste meat, they don’t go back. Meat requires several times more grains to produce. Show me the POT baby.
3. Companhia Vale do Rio Doce (RIO) - Steel producers being able to raise prices?  I think the real beneficiary here is Companhia Vale do Rio Doce (aka CVRD).  CVRD is the hand that’s squeezing the toothpaste of steel producers’ margins.  I don’t think steel producers want to raise prices.  Commodity prices are forcing them to.  They’re just passing on CVRD’s price hikes, not really expanding margins and making more mula.
4. Southern Copper Corp. (PCU) - Even though we don’t notice it, civilization is built on copper.  And man oh man are we building.
5. Precision Castparts Corp. (PCP) - Riding the commercial airplane replacement and buildout cycle. Also, essential for the furnaces going into the power plants popping up in China every 2 weeks.
6. ABB Ltd. (ABB) - Perfect play on the power grid (along with PCU and PCP), both the decaying ones in the U.S. and the new grids to be build in China, India, Russia, Europe, Mid East, and Latin America. A growth-value. Hard to say that about many stocks. A lot of advanced energy-generation and energy-conservation technologies no one talks about.
7. Foster Wheeler, Ltd. (FWLT) - No MDR, but should approach MDR’s perfection with the opportunities in the Middle East and especially in Asia. The new products they’re pushing including the CFB and Pluto platforms should help margins & efficiency explode.
8. McDermott International Inc. (MDR) - 4000% over 5 years, and still trading at the lower end of it’s P/E range. This should not be classified as a Engineering & Construction company. It’s a highly efficient mass (low cost) producer of oil & gas infrastructure.
9. TransOcean, Inc. (RIG) - love National Geographics’ “Oil, Sweat, and RIGs” series.
10. Chesapeake Energy Corp. (CHK) - Natty (natural gas) is so much cheaper on a BTU energy basis than oil. L.A.’s Long Beach harbor is already switching to NatGas for clean energy, other municipalities will do the same.
11. First Solar, Inc. (FSLR) - CdTe is the RIGHT semiconductor material for capturing solar energy, silicon is not. Simple as that.
12. L-3 Communications Holdings Inc. (LLL) - Best defense contractor. Period. Little to no operational risk and in a highly efficient niche of government contracts. No design and manufacturing problems that everyone from Lockheed Martin (LMT) to Northrop Grumman (NOC) and Boeing (BA) deal with daily. Raytheon (RTN) could have been like LLL, except RTN’s management prefers to run RTN like feudalism Japan.
13. Corning Inc. (GLW) - How awesome is that signal on the oscilloscope for the ClearCurve optical fibers?!?!!! THAT…is what gives engineers wet dreams.
14. Apple Inc. (AAPL) - iPhone should NOT a smartphone and shouldn’t be compared to a Blackberry (RIMM) or a Nokia (NOK) product. The iPhone is a full-fledged tablet PC with a complete operating system.
15. FTI Consulting, Inc. (FCN) - Anticipating lots of legal activity required in the aftermath of the credit/mortgage apocalypse. Municipals suing financial corporations, corporations restructing, etc.
16. Annaly Capital Management, Inc. (NLY) - Attempt to be the vulture, not the meat in this credit crisis. I can take the pain. No pain no gain.
17. Hologic Inc. (HOLX) - @ forefront of women’s diagnostics technology. Because like most people, I have a mother.
18. Altria Group Inc. (MO) - Yield, weak dollar, defensive diversification.  Don’t smoke. It’ll make you ugly…like a camel.
19. McDonald’s Corp. (MCD) - MickyD’s Baby! Yield, weak dollar, defensive diversification.

**Disclosure: Author is long UNP, POT, RIO, PCU, PCP, ABB, FWLT, MDR, RIG, CHK, FSLR, LLL, GLW, AAPL, FCN, NLY, HOLX, MO, MCD as of this post. **

After going to some 60% cash in early January, I’ve taken a seat high up in the bleachers to just watch the action and try not to get too involved.  As I keep hearing, and have been trying to do, patience is your best trading skill in a market like this.  If you’re not a great swing trader (I guess I’m ok, but its not gonna be how I make my name), then its probably best to take it slow and not throw everything at the momentum names like Apple (AAPL) last year.  I’m not particularly a big fan of Warren Buffet, but yes, maybe it is time to go to Buffet style this year as we meander around and frustrate short term players.  Even the fact that Warren himself has come out to play, getting involved with the bond insurers and becoming the biggest share holder in Kraft.

I do not believe the worst is over.  Even as the banks’ writedowns keep coming in, I’m still waiting for the Armageddons that’s the $2 Trillion aggregate damages related to mortgages and CDOs Annaly (NLY) CEO Mike Farrell has estimated.  With under about $200 Billion in writedowns and borrowings from the Fed’s TAFy auctions, we still have a ways to go as you can see.  Having said that, these go-nowhere days are great for doing homework.  I’m going to pick at some of my long-term investments on today’s rather bullish action so far (bullish because I would’ve expected us to be down much more on the inflation data in the CPI and the breakdown of another private equity deal between 3COM and Bain Capital).

1. MO - building up this position to be the largest holding in the portfolio head of the breakup of the domestic and Philip Morris International businesses and the opportunities that comes with, including increased buybacks, dividends, and realization of extraneous assets such as Altria’s 28.6% stake in SAB Miller.  No question in my mind that the Fed’s excessive rate hikes have put the U.S. into a recession, which makes defensive names like Altria great right now.

The Fed raised rates to knock down inflation, which has been caused by international growth not U.S. growth.  I guess the Fed is finally finding out that it’s “broad hammer” tool of interest rates hammers the U.S. much harder than the rest of the world.  So, global growth continues, commodities continues to rise, and the U.S. has to deal with stagflation where inflation continues because the rest of the world keeps growing and Americans have less money to buy the inflated goods because the economy’s weak, their houses are worth less, and their retirement funds have shrunk.

2. PCU - So, I’ve taken a starter position in PCU with the intention of building up a larger position.  U.S. home construction has been nonexistent and thus a non-factor in copper prices.  Manufacturing activity has fallen off quite a bit in the U.S., yet copper prices are again trying to take out that $375 mark (as pointed out by Helene Meisler on RealMoney.com today).  Also, China’s determination to keep Rio Tinto out of BHP’s hands tells me commodities are still in short supply, or so says those in charge of the country…who I’d say are much much smarter than me.

3.  POT - Same here.  Higher commodities are here to stay.  If you saw how the CEO was salivating bullishness on Fast Money last week, you’d want into this stock too.  I’m taking a starter position and hoping this thing pulls back, although it’s just tapped another all-time high and got legs to go higher.  The interesting point that the CEO made was, once the rising middle class tries meat as a source of protein, they never go back.  But as I learned in h.s. biology, it more energy efficient to have a vegetarian diet than to feed those crops to livestock.  In other words, higher demand for meat requires a lot more crops, and thereby requiring a lot more fertilizers as well as farmland (bodes well for Deere still).

4.  PCP - Boosted this position to a meaningful size as orders for the 787 Dreamliner as well as smaller planes keep coming in.  I thought we could see another big drop in 787-related names, but I’m not so sure now so I want to at least have a good stack of PCP.  Boeing’s nearly finished with another 787 for testing purposes, and have 2 more on the way, so demand for PCP’s products aren’t going to fall off as sharply as if the whole production was on hold.  Also, China building a power plant every 2 weeks certainly helps the demand for high-performance metals.

5.  UNP - Coal on fire? (no pun intended)  Got to move the coal to the coast somehow so they can be shipped to China.  Same with the ag story and moving fertilizers to the coasts.  See how nice the world starting from the U.S. coast and beyond looks?  Already had a position. Building it up.

*Disclosure: Author owns AAPL, MO, PCU, POT, PCP, and UNP as of this post *