Investcraft – The Art of Investing

Stock market has been pretty volatile the past couple of weeks. That means everyone should stay nimble. The 3 key elements this week that may shift the momentum of the markets are: Greece, Goldman Sachs and Economic Reports.

Warren Buffet did the whole market a huge favor by putting his reputation on the line for Goldman. I think that takes a lot of guts considering that the whole SEC and the US Government are bashing GS. Buffet put the whole financial sector at ease with his endorsement — at least, for the short term.

Greece’s debt problems are also a market-sentiment-changing event. It looks like Germany gave the OK to bail out Greece which should also help ease people’s concerns over Greece’s debt.

The economic reports, recently, have been fairly predictable. Predictability is a very good thing for the stock market.

But just keep in mind that while the mood has improved from 2 weeks ago, these problems are still there and will linger for quite some time. Be ready for more volatility.

With that said, here’s a summary of my recent activity.

ADDITIONS

BPOPO – Banco Popular Preferred A
BPOP – Banco Popular
BZH – Beazer Homes Inc.
FITB – Fifth Third Bancorp
LOCM – Local.com Corp
PFBC – Preferred Bank
STI – SunTrust Banks, Inc.

SUBTRACTIONS

CSKI – China Sky One Medical, Inc.
AACFX – AIM CHINA CLASS A
IARAX – AIM REAL ESTATE FUND CLASS A
BPOPP – Banco Popular Preferred B
EJ – E-House (China) Holdings

EXISTING HOLDINGS

AKAM – Akamai Technologies, Inc.
ALSC – Alliance Semiconductor
ARUN – Aruba Networks, Inc.
BAC – Bank of America Corporation
CHINA – CDC Corporation
CPBY – China Information Security Tech
ETFC – E*TRADE Financial Corporation
FBCM – FBR Capital Markets Corporation
FHN – First Horizon National Corporation
HBAN – Huntington Bancshares
IBCA – Intervest Bancshares Corp.
JGBO – JIANGBO PHARMACEUTCL
KEY – KeyCorp Common Stock
LVS – Las Vegas Sands Corp.
NYVTX – DAVIS NEW YORK VENTURE FUND A
OKSB – Southwest Bancorp, Inc.
PNC – PNC Financial Services Group
RAS – RAIT Financial Trust
RF – Regions Financial Corporation
RODM – Rodman & Renshaw Capital Group
SKBI – Skystar Bio-Pharmaceutical
SKS – Saks Incorporated Common Stock
SUSQ – Susquehanna Bancshares, Inc.
TBBK – The Bancorp, Inc.
UBS – UBS AG Common Stock
WFD – Westfield Financial, Inc.

Summary

LOCM (NASDAQ: LOCM)
I added several stocks I felt were undervalued relative to the rest of the market. I think LOCM was a real find — traffic and profits are growing rapidly at LOCM. I think it’s possible that some large Internet company will gobble up LOCM at some point. Local search is so valuable these days — just look at how much Yelp! is worth.

BPOP (NASDAQ: BPOP)
As for BPOP and BPOPO/BPOPP (preferreds), I decided to sell BPOPP and buy BPOPO because the series A seem like better value. There’s a good chance BPOP will survive the Great Recession and if it does, those preferred shares may approach their $25 face values at some point.

Mutual Funds
I sold out of my AACFX and IARAX mutual funds. I just think that if I am managing my own portfolio, I really shouldn’t be dabbling in mutual funds. I rather put that money to better use buying companies that have solid potential for growth and value.

Buying Small Banks
I bought a few small banks lately. I think considering the run-up that many larger and regional banks have had, it’s time for the smaller banks to rise as well. Many of them are doing much better in 2010 vs 2009 and I believe their stock prices will follow.