Brook Reef

Buying STEM @ $23.68 1% position Adding another lottery ticket sort of company to my EVGo holdings. Via a long-term contact, I got in touch with Stem and learned a bit about them. It's a battery play for industrial customers and possibly grid-scale. While the company sells hardware (batteries), the real secret sauce is their software. Earnings are a bit tough so here's a quick rundown and example: For a $100 sale, only $40 shows up as revenues in Year 1. The remaining "revenues" show up over 40 years despite Stem taking in $100 of cash. However, ALL of the costs show up in Year 1. Say the margin is 25% for illustration. This means, Stem shows a loss of $35 on this sale in the first year DESPITE bringing in $100 of cash. Since STEM is a growth company, this accounting loss problem will continue. So the company won't be "profitable" for a long, long time. But unlike many other similar stories of earnings losses, the economics are CASH positive today! If I ...

Selling OGE @ $33.60 Realized loss of $1.80 (5.08%) Taking a loss here on OGE. It hasn't worked and after more digging and research on the thesis I had for buying it - energy transition (shut down of dirty power plants replaced with clean) - is going to be more full of glitches and pushback than I thought. Utility execs in oil country are dinosaurs! I'd stick with the idea if it was working, but nothing about this trade is going well.

Buy to Cover KRE @ $62.50 Realized gain of $0.90 (1.42%) I kept my stop loss overnight and it got triggered on the open today to lock-in a reasonable gain. I have a "feeling" that the Fed release today will drive markets down - ethics concerns, taper desire, etc. But I'm going to stick with my 20% net long & gross positioning. (See note coming on sale of OGE) My holdings are fairly high conviction picks that I'm willing to add to, so not a big deal if markets go down and I get that chance. If weakness seems to be "real" finally, I'll push on some shorts again.  TBD - and stay tuned to what PE Powell has to say.

Yesterday's stop loss on KRE @ $62.10 expired - which is how I like to run these sorts of orders. Why take a puke open that triggers the trade? With today's market now open for 10 minutes or so, I'll re-enter my stop-loss at $62.45. I covered my SPY short yesterday for a solid profit, especially looking at the green open today - so will survive reducing my profit on this trade.  J. Powell and the Fed are having a meeting today and tomorrow. Even though they've hopefully stopped trading in their personal accounts, it's hard to see them instantly tapering or reducing their buying. Bubble continues to build. When will it pop?

Covering SPY short @ $428.91 Realized gain of $16.09 (3.62%) As much as I think the stock market is hugely over-valued and over-bought, that doesn't always translate into short-term realities. So I'll take this recent selloff to lock-in my profit and move along with my life for now. The Fed starts their meeting tomorrow - with a release Wednesday. How they respond to their Presidents owning/buying/trading stocks and index futures all of the way up will be telling. They should be fired, sent to jail, or worse. But the Fed is also propping up the markets. Staying short might be the better read here - but I like to take profits when I get them too...

SPY @ $437.00 KRE @ $62.10 With the selloff today due to China and their Evergrande or )whatever the name) issue - my shorts have become profitable. I'll put on stop losses to lock in some modest gains while hoping they don't get triggered and continue to work as trades. For this kind of a trade/stop-loss, I set the order above the high of the day. Both have made big moves down at the open. If they have a "reversal" today, that's a sign the trade might not work the next day and beyond.  I can now go about my day knowing that these trades will pay me even if the market turns around. I don't know what to make of the contagion risk from this. But spiderwebs of debt don't end in a few days - and who knows how much it will affect the world.

Shorting SPY @ $445.00 - 5% position Shorting KRE @ $63.40 - 5% position I'm shorting the S&P 500 and Regional Banks here this afternoon. I'm seeing the VIX unable to drop, interest rates making a run lower, and all moving averages for the major indices giving a SELL signal. So I'll push out some shorts (still 12% net long) and protect my downside. If the signals change, I'll take a loss here - but it looks like this is a pragmatic risk-management decision. Imagine the selloff and DEFLATIONARY shock if accommodative policies go away!

Buying CAG @ $33.30 2% position I tend to stick to utility companies, but when hunting for cheap stocks I came across a company we all know and use regularly - ConAgra. They make packaged foods in a variety of brands you probably have in your pantry.  The stock hasn't really moved in 5 years - trading between $25 and $40 in that time. However, earnings have grown from $1.46/share to $2.66/share - leaving the stock trading at something like 12.5x earnings. CAG also has a decent dividend yield at ~3.3% and recently increased the payout. I owned some CAG a long time ago and think this is a decent place to begin a new position.

Selling 1/2 of EIX position @ $58.34 Realized gain of $2.56 (4.59%) I'm taking the second half of my EIX position off the table. The share price is now over where I bought the initial slug of the position, giving me the ability to lighten back up. I'll happily buy more back near $55 or lower - but think taking a nearly 5% gain is prudent. Looking for great investment ideas is difficult right now given insane valuations and bubbly risks everywhere. So I'll keep treading lightly in names I know fairly well.