Month: March 2011

LZ Lubrizol or when do things become unethical?

Hamilton

All day I watched CNBC and other programs and I am totally amazed at the generally cavalier attitude displayed by some of the talking heads who, in some cases, are even apologetic .

Here are the long and short term charts;

lz 2 lz

I know absolutely nothing about this company other than that it makes lubricants. Not a business that is generally expected to take-off. But it has from $30 to $135 (that is the bid by Berkshire). Makes you wonder if the sage of Omaha is still the Graham & Dodd “buy low and never sell” type of guy, but that is a whole different matter. So this crown prince successor in waiting buys a few shares , 96,060 to be exact, over three days Jan 4, 5 and 6 after he initiated a contact with Citigroup that took place about a fortnight earlier. Actual contact takes place, first by phone on Jan 14 and (a week after purchase) and again on Jan 25. The deal is announced two months later.  This fellow is quite wealthy having sold his company to Berkshire and over the last 10 years or so having earned about $56 mln. Evenso how often is an order by an individual entered for $10mln in XYZ share? Not very often. Why at that point in time as the stock had been a lot cheaper earlier. The 3 mln profit is peanuts compared to what could have been earned if the timing was a little better, that is the market timing, not the timing dead smack in the middle between the initiation of the process and the first talks! We will get some very sophisticated arguments in the next few days to explain away this unfortunate mishap. Personally I would be just a little agnostic.

BBD.B Bombardier

Hamilton

We liked this stock right at the low of $2.25 and sold at $5.70 (see previous blogs) mentioning that we liked the stock for the long-run as well and look at it again. I neglected to do that. Today the profits reported were 82% higher than last time and the company at long last seems to be firing on all cylinders. If you like “infrastructure”, this is as pure a play as you can get. Here are the charts;

bbd.b2011 bbd.b2 2011

The drop from $26 to $2 qualifies as a bear market. As the last leg down in 2008 is a very clear 5-waves (see previous blogs) and therefore probable a c wave, the best count is an a-b-c X a-b-c. From there a new bull market should start. If that is correct you are now in a third wave of the first upleg. This could and should ULTIMATELY lead to a new high years from now. In the mean time if wrong expect at least an a-b-c counter-trend move as we have seen so many of, which should still take us to about $8.

Below was the chart then, just a few days before hitting a low;

 BBD.B march 9

IMN, Inmet

Hamilton

imn 2011 2  imn 2011

Now that , predictable , the deal with Lundin is dead, the stock has a good chance of rallying roughly $6. It came down in a clear 5 wave sequence, right to the low point of a previous 4th wave triangle and has completed an a-b with a c still to come . That is the minimum expectation. It could possible go higher if the very large B-wave from the lows was not yet complete. Do not believe that it was not but who knows for sure. Use a stop at yesterdays close.

CCO update.

Hamilton

CCO march 27 2011

CCO is behaving more or less as expected. Still looking for that missing 5th wave down. We may be in it already or we could be tracing out a triangle that will simple consume a little more time. Nevertheless the target stays the same, $24.50 or maybe a little lower. There is should be a buy.