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2011 February 25 Update


The selection list was generated before the market opening. The portfolio and capital gains summary are current to the market close.


Selection list

This selection list is for purchases of 2013 call options. The Yahoo Java screener was used to find stocks with PEG ratio at least 0.01, historical price data for the stocks in the lowest 20% of PEG ratios were downloaded from the MSN database, and current trends were calculated. Stocks without 2013 options were eliminated.

These are the twenty stocks with the strongest uptrends. The premium ratio Rp is for a nonexistent 2013 call option with strike price equal to the price of the underlying security:

TICKER SYMBOL AND NAME    Trend Rp                      ACTIVITY AND MARKET
-------------------------  ---  --  ---------------------------------------
SPRD  Spreadtrum Comm      304  32  mobile semiconductor design      global
BIDU  Baidu Inc            245  24  Internet search services          China
RDWR  Radware Ltd          212  15  network data software            global
LTD   Limited Brands       172  16  women's apparel stores              USA
DECK  Deckers Outdoor      172  26  outdoor/casual footwear             USA
CVC   Cablevision Systems  157  16  cable TV, telecom, media            USA
CAT   Caterpillar Inc      156  16  construction/mining equipment    global
ITMN  InterMune Inc        152  29  pulmonology/hepatology biotech  USA/Eur
XEC   Cimarex Energy       150  18  onshore upstream oil/gas         global
AAPL  Apple Inc            147  20  mobile devices, computers        global
MET   MetLife Inc          139  17  insurance, financial services    global
CBS   CBS Corp             138  19  diverse mass media                  USA
CSX   CSX Corp             128  15  freight railroad                 N Amer
SLM   SLM Corp             126  21  education finance services          USA
NVLS  Novellus Systems     125  19  semiconductor fab equipment      global
BRCM  Broadcom Corp        113  19  communications semiconductors    global
LRCX  Lam Research Corp    111  21  semiconductor fab equipment      global
ESRX  Express Scripts       98  17  pharmacy benefit services        N Amer
PCS   MetroPCS Comm         95  23  wireless mobile services            USA
TQNT  TriQuint Semicond     94  26  semiconductor design/fab         global

Portfolio

The January Barometer was positive, so I will not hedge this year or in January 2012. After that there will be a new Barometer signal.

I chose CAT for the periodic purchase, buying options to leverage my cash. I bypassed SPRD and BIDU because their premium ratios are too high, RDWR and DECK because I already own them, LTD because it is more than halfway towards a trend reversal, and CVC because most of the gain in the current trend occurred shortly after the 2009 bear market bottom.

TICKER SYMBOL AND NAME           QTY        START               TODAY      
-------------------------       ----  -----------------   -----------------
AAPL13C345  Apple Inc call         1  01/27/11    6,566   02/25/11    6,867
ALV   Autoliv Inc                300  08/27/10   16,595   02/25/11   22,290
CAT13C105 Caterpillar Inc call     2  02/25/11    2,391                    
CHL   China Mobile               700  04/19/05   11,323   02/25/11   32,879
CTSH  Cognizant Technology       350  06/26/09    9,300   02/25/11   26,778
CXO   Concho Resources           300  07/27/10   18,009   02/25/11   32,937
DECK  Deckers Outdoor            300  12/15/10   24,431   02/25/11   26,490
HS    HealthSpring Inc          1000  03/26/10   17,710   02/25/11   37,380
HTGC  Hercules Technology       2000  05/27/10   17,974   02/25/11   21,940
LZ    Lubrizol Corp              200  09/27/10   21,411   02/25/11   21,694
NNI   Nelnet Inc                1000  10/27/10   23,062   02/25/11   22,270
RDWR  Radware Ltd               1000  06/25/10   21,030   02/25/11   38,010

Capital gains

05/27  06/25  07/27  08/27  09/27  10/27  11/26  12/15  01/27  02/25   Bull
-----  -----  -----  -----  -----  -----  -----  -----  -----  -----  -----
                                                                 301  AAPLc
                             2392   2250   1200   1137    702  -1986    ALV
                                                                       CATc
-1561   2296     56   1421   -812   -252   -623   -777    126  -1729    CHL
 -511   1274   1505   2185                                             CTSH
                      1351   1838    760     84   1046   1376   1168   CTSH
-1982                                                                  CVVT
                      -402   1365   1593   3768    885   1077   6642    CXO
                                                        -1445   3504   DECK
-3374                                                                   FCX
-2055  -2257                                                           GLNG
 2380  -2275    175   6188                                             HGRD
  630   -530     30   3350   5380    660   1080   -210   5070   4900     HS
        1046   1880  -2100    920   1040   -640    100   1440    280   HTGC
                                    1151  -1146    -40    272     46     LZ
                                           -822    420    230   -620    NNI
               1970   2270   8230   2480  -3590   6370  -1890   1140   RDWR
                                                  1454  -4166           SLW
-----  -----  -----  -----  -----  -----  -----  -----  -----  -----  -----
-6473   -446   5616  14262  19313   9682   -689  10385   2792  13646  Total

05/27  06/25  07/27  08/27  09/27  10/27  11/26  12/15  01/27  02/25  Hedge
-----  -----  -----  -----  -----  -----  -----  -----  -----  -----  -----
  345                                                                   CHA
 1942   -483  -1351    609  -2483  -1104                                EEM
 2316    868  -1105   1407  -2223  -1114                                SPY
                               86  -2214                               TRWp
  420  -1950                                                            UNG
 1260     -9   -315    579  -1503    311                                WLP
 1426                                                                   XLB
                                    -674                               XLBp
         223   -248   1605  -1073   -180                                XLF
              -1710   1350  -2090  -1120                                XLK
 1650      0    140    360                                              XLV
                       521  -1335   -244                               XOPp
-----  -----  -----  -----  -----  -----  -----  -----  -----  -----  -----
 9359  -1351  -4589   5900 -10621  -6339      0      0      0      0  Total